Daily September E-mini S&P 500 Index

E-mini S&P 500 Index (ES) Futures Analysis – July 8, 2013

The September E-mini S&P 500 Index is trading higher overnight. Traders appear to be ignoring the possibility the Fed will begin winding down its stimulus program and instead are reacting to the prospect of a stronger economy. While the Fed’s action may mean higher interest rates, the market is trading as if the money leaving the treasurys is moving into the equities.

There are no major economic reports today, but after the close Alcoa (AA) kicks off earnings season with its second quarter results. The biggest event for the week will be the Fed minutes on Wednesday. Traders will be looking for clues as to what Federal Open Market Committee members think about the central bank’s tapering plans and what factors caused the Fed to lean towards tapering soon. The minutes have the potential to put an end to the current rally.

Daily September E-mini S&P 500 Index
Daily September E-mini S&P 500 Index

Technically, the September E-mini S&P 500 is trading better than 61.8% of the 1680.25 to 1553.25 range. This puts the market in a strong position to rally higher with the June 19 top at 1649.00 the next likely upside target.

Short-term support comes in today at 1625.25. Near-term resistance is being tested at 1637.00. This is followed by a downtrending Gann angle at 1643.00 then the main top at 1649.00.

Momentum is clearly pointing up, but with the market up nine sessions since the bottom at 1553.25 and approaching a former top; don’t be surprised by a late session reversal. Some weaker longs may also decide to pare positions ahead of Wednesday’s Fed minutes. 

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

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