E-mini S&P 500 Index (ES) Futures Analysis – March 25, 2013

The June E-mini S&P 500 surged overnight as news of the deal to avert a financial crisis in Cyprus hit the market. The agreement between Cyprus and the European Union helped drive up demand for higher yielding assets.

Without any major U.S. economic reports, investors are likely to watch the action in the Euro because of lingering issues regarding Cyprus, political uncertainty in Italy and the economic slowdown in the Euro Zone.

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

With the Cyprus worry lifted overnight, the June E-mini S&P 500 futures contract reached a new contract high at 1560.50. The follow-through rally is going to be the key to sustaining the move. Investors have to attack this breakout with conviction to give the appearance that fresh money is coming in to support the rally. The longer it lingers near the 1558.00 to 1560.00 area, the more this rally begins to look like short-covering.

The overnight action also helped the index cross back over to the bullish side of an uptrending Gann angle at 1556.25. This angle may act like a pivot price today. Breaking the two bottoms at 1535.00 and 1529.50 will be signs of weakness, but not necessarily a change in trend.

This is a holiday shortened week so we may see heavy trading early in the week, but then a drop off as we approach Friday. This could produce thinly traded, volatile trading conditions. 

S&P 500 Futures forecast for the week of March 25, 2013, Technical Analysis

The S&P 500 futures market initially fell during the week as the markets sold off due to news coming out of Cyprus. However, by the end of the week we saw a pretty significant buyback and formed a beautiful hammer sitting just above the 1550 level. We still see the 1500 level as being massively supportive, and a potential “floor” in this market, so to see this kind of action only solidifies our bullishness in this index. Going forward, on a break of the highs from the week, we fully expect this market to continue higher. Again, if we pull back to the 1500 range, we would fully expect support the whole there as well.

 

S&P 500 Futures forecast for the week of March 25, 2013, Technical Analysis
S&P 500 Futures forecast for the week of March 25, 2013, Technical Analysis

S&P 500 Futures Forecast March 25, 2013, Technical Analysis

The S&P 500 futures market rose during the session on Friday, as the 1540 level continues to offer support. We believe that this market will start pick up the volume and direction once we can get above the 1560 level, and as a result we are more than happy to start buying up in the general vicinity. As far as selling is concerned, even if we pull back we see most weakness of the potential buying signal. 1500 should continue to be massively supportive, and as such as long as we are above that level, we are only buying.

 

S&P 500 Futures Forecast March 25, 2013, Technical Analysis
S&P 500 Futures Forecast March 25, 2013, Technical Analysis

E-mini S&P 500 Index (ES) Futures Analysis – March 22, 2013

Increased demand for higher risk assets helped the June E-mini S&P 500 rebound in the overnight session, turning the market higher as we approach today’s cash market opening. The easing of tensions in Cyprus is helping to lift some of the uncertainty that had pressured the market earlier in the week. Stocks rose overnight after Cyprus agreed to spin off Greek units of debt-ridden Cypriot banks.

Although the market is a little better now, conditions may shift throughout the day as Cypriot leaders have to decide whether to accept the European Central Bank bailout ultimatum or face the possibility of bank failures. This lingering news could produce choppy, two-sided trading conditions today.

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

Although the main trend is up, the June E-mini S&P 500 appears to be vulnerable to a break. Last week’s closing price reversal top at 1558.75 is intact which suggests the market may still correct into a major 50% level at 1517.50.

On the upside, the key number to watch is the pivot at 1544.25. This price represents the mid-point of the 1558.75 to 1529.50 range and is an important indicator of the market’s strength and weakness. Currently, it is acting as resistance, but crossing back over to the bullish side could draw the attention of buyers. 

S&P 500 Futures Forecast March 22, 2013, Technical Analysis

The S&P 500 futures fell during the Thursday session as fear of the Cypriot banking failures continue to plague the markets. Adding to that is the fact that Federal Express and Cisco both had horrible earnings announcement, and because of this a bit of a “risk off” type of trade came into play. With this being said, we are not ready to start shorting this market as there is far too much in the way of liquidity out there at the hand of the Federal Reserve to do so. Going forward, we would either buy a supportive candle on a pullback, or a move above the recent highs from last week.

 

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E-mini S&P 500 Index (ES) Futures Analysis – March 21, 2013

The June E-mini S&P 500 Index is trading flat shortly ahead of the cash market opening. The trading action suggests that investors have already moved on following yesterday’s Fed policy statement.

Overnight Cyprus was in the news again after the European Central Bank gave the country a bailout ultimatum. The failure to accept the bailout terms would encourage investors to dump risky assets. This would put pressure on the stock indices.

On tap today is weekly jobless claims, existing home sales and the Philly Fed business survey. All of these reports will give a pulse of the economy. Yesterday the Fed said it would continue its quantitative easing program and offered no ending date. It also called for moderate economic growth.

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

Technically, the June E-mini S&P 500 Index is trying to regain an important uptrending Gann angle at 1548.25. Holding above this angle will put the index in a position to rally further.

Based on the short-term range of 1558.75 to 1529.50, a pivot price has formed at 1544.25. The market straddled this price three times this week. Overnight, the pivot held as support, suggesting strength. Traders should watch this pivot for direction today.

It looks as if investors are confused about the Cyprus situation. If it blows up into something big, then look for a sharp break similar to the sell-off early Monday. If the situation is diffused, investors are likely to drive up prices. 

S&P 500 Futures Forecast March 21, 2013, Technical Analysis

The S&P 500 futures market had a strong showing on Wednesday as the 1540 level offered plenty of support. We didn’t managed to break above the 1560 level which was the recent high, but it does look like we’re going to do so eventually. The candle was bullish, and the Monday and Tuesday candles were both hammers. Because of this combination, we are very bullish of the S&P 500 futures now, and do believe that we will eventually test as high as 1600 and the relatively near-term. We see quite a bit of support down the 1500 as well, and would buy pullbacks going down to that level that shows signs of support.

 

S&P 500 Futures Forecast March 21, 2013, Technical Analysis
S&P 500 Futures Forecast March 21, 2013, Technical Analysis

E-mini S&P 500 Index (ES) Futures Analysis – March 20, 2013

The June E-mini S&P 500 is surging this morning shortly ahead of the U.S. cash market opening. The recovery is mostly due to the rejection by Cyprus of the proposed bank levy and optimism that the Fed will continue its loose money policy.

Cypriot leaders calmed the market on Tuesday when they voted to reject the proposed bank levy. The situation may still make traders nervous, but meetings are being held to prevent a breakdown. Some analysts have described the situation as “disarray”, but based on the way the Euro is recovering, it looks as if something positive may be developing.

Today the U.S. Federal Reserve releases its monetary policy statement later in the session. This morning’s rally suggests that investors are looking for the Fed to sustain its $85 billion monthly bond-buying stimulus program. Although U.S. economic data suggests a recovery is taking place, it may not be meeting Fed expectations. Keeping the course will likely mean the rally will continue. Any hints at reducing the program or suggesting an ending date will be bearish.

Fed Chairman Bernanke is also scheduled to hold a press conference today. The tone of his answers will be watched closely. Traders want to hear his assessment of the economy as well as the Fed’s future plans.

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

Technically, the June E-mini S&P 500 is trading on the bullish side of an uptrending Gann angle at 1544.25. In addition, it has crossed over to the bullish side of a short-term retracement zone at 1547.50 to 1544.00. The 1544.25 to 1544.00 support cluster is providing the best support today.  A break under this zone could trigger the start of a sell-off.

Last week’s close at 1553.50 and last week’s high at 1558.75 are the best resistance levels. The main trend is up, but the market is still under the influence of last week’s closing price reversal top. This chart pattern will remain intact until 1558.75 is violated. It typically leads to a 50% correction of the last range; making 1517.50 a potential target should selling pressure from earlier in the week resume. 

S&P 500 Index Futures Forecast March 20, 2013, Technical Analysis

The S&P 500 index futures fell during the session on Tuesday, as fears over Cyprus expanded. Having said this, you can see that the 1540 level offered support yet again. This market does look like it has a bit of a lift to it, and towards the end of the day we started to flirt with the index itself rebounding quite nicely. Going forward, we think that this market is still bullish, at least until we can figure out exactly what’s going on in Europe, simply because of liquidity. As long as the Federal Reserve stands behind the markets, they will go higher, no matter what. Of course, you have to begin to worry about bubbles later, but that is nothing that should be showing itself anytime soon.

 

S&P 500 Index Futures Forecast March 20, 2013, Technical Analysis
S&P 500 Index Futures Forecast March 20, 2013, Technical Analysis

E-mini S&P 500 Index (ES) Futures Analysis – March 19, 2013

The June E-mini S&P 500 index is trading flat overnight following a huge rebound rally on Monday. The trading action took place inside of yesterday’s wide range. The listless trade suggests that traders are putting a lot of weight on the vote in Cyprus on whether to move forward with its plan to put a levy on bank deposits.

The week started out with a gap-lower opening, but this gap was filled by the end of the day. Traders were reacting negatively to the news that lenders were putting pressure on Cyprus to impose a levy on bank deposits to pay for a bailout. This caused a drop in the Euro as capital fled the country and sought shelter in safer currencies. Additionally, investors pared positions in equities while parking funds in the dollar and gold. Conditions calmed throughout the session ahead of today’s vote which could still be a market moving event.

Prior to the Cyprus vote, investors will get a chance to react to U.S. Housing Starts and Building Permits. Both of these reports are expected to show increases which could help support the idea that the economy is improving. Also on the slate is the start of the Fed two-day meeting. Most traders expect the Fed to leave interest rates unchanged and to continue its asset-buyback program. There is expected to be some debate as to whether the central bank should slow-down its rate of mortgage purchases or set an ending date to the program.

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

Technically, the most important number is 1540.25. This price represents the position of an uptrending Gann angle from the February 25 bottom at 1476.25. On Monday, the market went through this angle but failed to attract additional selling pressure. Another break through this angle today could be a sign that the market is weakening and that long traders are beginning to bailout.

The short-term range is 1558.75 to 1529.50. The retracement zone of this range is 1544.00 to 1547.50. The upper level of this zone is being tested this morning. Watch for this zone to act as a pivot.

On March 15, the June E-mini S&P 500 posted a potentially bearish closing price reversal top. On Monday this chart pattern was confirmed, setting up the possibility of the start of a break into 1517.50 to 1507.75. Unless the market makes a new high through 1558.75, traders have to be on the look-out for the correction. Remember to protect the downside; the upside will take care of itself since the main trend is up. 

S&P 500 Futures Forecast March 19, 2013, Technical Analysis

The S&P 500 futures fell during the session on Monday, as did all world indices in general. We eventually saw the market come back though, and lose just six points. By the time the session was over, the gap had been filled, and we did form something that looks along the lines of a hammer. Because of this, it appears the S&P will continue be bullish, but we need to see the 1560 level broken to the upside in order to be comfortable. Otherwise, a pullback to the 1520 level would be a buying opportunity as well, on signs of support.

 

S&P 500 Futures Forecast March 19, 2013, Technical Analysis
S&P 500 Futures Forecast March 19, 2013, Technical Analysis

E-mini S&P 500 Index (ES) Futures Analysis – March 18, 2013

The June E-mini S&P 500 opened sharply lower on Monday. The selling pressure was so great that the market gapped the previous day’s low at 1549.00. This move confirmed Friday’s closing price reversal top at 1558.75 and signaled the start of a 2 to 3 day break to 1517.50 – 1507.75.

Another sign of weakness was the breaking of a long-term uptrending Gann angle at 1536.25. This angle had provided strength and direction for the market since bottoming at 1476.25 on February 25. This angle is likely to act as a pivot price throughout the day. Breaking under it suggests weakness, regaining it suggests short-covering.

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

The market straddled this angle during the overnight session. Based on the short-term range of 1558.75 to 1529.50, the market has the potential to retrace back to 1544.25 – 1547.75. Bearish traders are likely to try to form a secondary lower-top inside of this range. This would send a signal that the selling is greater than the buying.

Friday’s closing price reversal top was triggered by bearish U.S. economic conditions. The overnight weakness was fueled by bearish news out of Cyprus affecting the Euro. Since bearish sentiment appears to be controlling the market today, expectations are for sellers to hit the market early in the session inside of the short-term retracement zone.

Since it is likely to be a new driven day, traders should watch for volatility. Since sentiment seems to be turning bearish, traders are likely to sell rallies. Since investors often shy away from selling weakness, they may attempt to fill the gap at 1544.00 to 1549. Watch for a test of this zone early then read the order flow to see if sellers are in control.

 

S&P 500 Futures forecast for the week of March 18, 2013, Technical Analysis

The S&P 500 futures had a slightly positive week of the last five sessions, to continue this remarkable run we have seen since the 1400 level. Essentially, there have only been positive weeks since the beginning of the year, and this session would be no different. However, we are approaching the all-time highs of the S&P index, and as a result we think that a pullback could be coming. Nonetheless, we do see a significant amount of support at the 1520 level, extending all the way down to about 1475. We would love to see a pullback to that area that shows signs of support to continue buying. However, we managed to break the 1556 level, we would have to think that the markets going higher at that point.

 

S&P 500 Futures forecast for the week of March 18, 2013, Technical Analysis
S&P 500 Futures forecast for the week of March 18, 2013, Technical Analysis

S&P 500 Futures Forecast March 18, 2013, Technical Analysis

The S&P 500 futures had a back and forth session during the Friday trading hours as the market essentially went nowhere. The index itself fell a handful points, failing to break above the 1556 all-time high that traders would have targeted. Nonetheless, it makes sense that this market would drift a little lower after having so many bullish days in a row. With this being said, we prefer to wait for some type of pullback in order to start buying the futures market again. For us, the 1520s level looks very supportive. A pullback to that area with some type of supportive price action would be enough to have a start buying again. Alternately, if we managed to break above the 1560 level, we would be buyers as well.

 

S&P 500 Futures Forecast March 18, 2013, Technical Analysis
S&P 500 Futures Forecast March 18, 2013, Technical Analysis

E-mini S&P 500 Index (ES) Futures Analysis – March 15, 2013

The June E-mini S&P 500 Index is trading lower overnight after posting a new move high at 1558.75. A closing price reversal top today would not be a surprise since time is indicating the market is overdue for a correction. Although the market has been heading higher, volume has been suspect and volatility has been flat. Both are indicative of topping action. Professionals may be selling the rallies or rebalancing ahead of the end of the quarter. We’re not going to know until we see a topping formation like the closing price reversal.

Fundamentally, traders will be focused today on the New York Federal Reserve Empire State Manufacturing Survey for March, February’s Consumer Price Index, and the Thompson Reuters and the University of Michigan’s release of their preliminary consumer sentiment index. All of these reports can move the market.

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

Uncertainty could help bring prices back to earth today. Traders are expressing concerns about whether the string of bullish economic reports is enough to make the Fed consider ending its quantitative easing program earlier than expected. Traders will be watching the Consumer Price Index report closely to see if it confirms the strength exhibited by last week’s improving jobs data and this week’s bullish retail sales report.

There is no question the main trend is up, but investors still have to be concerned about protecting their profits. The key to catching the turn is to watch for the unusual. For example, taking out the previous day’s low could be a sign or weakness as well as a daily closing price reversal top. The intraday charts should also be watched for similar patterns especially the 60-minute chart. 

S&P 500 Futures Forecast March 15, 2013, Technical Analysis

The S&P 500 futures rose during the session on Thursday as the market flirted with the all-time highs. It didn’t quite get there, but is just a point or two shy of it at the close. As a result, the futures market did quite well also, and it does in fact look like we could see some continued momentum to the upside. With this being said, we are buying this market on pullbacks that show inclinations of support. As far as selling is concerned, we have aptly no interest in doing so until we get well below current levels.

 

sp500

E-mini S&P 500 Index (ES) Futures Analysis – March 14, 2013

The June E-mini S&P 500 Index is trading a little better ahead of the opening. Traders will try to keep the winning streak alive today while attempting to drive the cash index to a new all-time high. Volatility remains down as well as volume, suggesting nervousness, but so far no one wants to fight the trend. Momentum has slowed considerably suggesting that perhaps some investors are unloading long positions on the rallies.

On Wednesday, a better-than-expected U.S. Retail Sales report helped drive prices higher. This report basically confirmed Friday’s U.S. jobs data, indicating an improving economy. Some analysts are now calling for GDP to grow at 2.2%. This is up from 1.9%.

Today, investors will be given the opportunity to react to weekly jobless claims and the Producer Price Index. Traders don’t want any surprises because they are nervous at current price levels.

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

Technically, the main trend is up. The main trend is not even being threatened; the market is however in the window for a closing price reversal top. This chart pattern typically signals the start of a 2 to 3 day break equal to at least 50% of the last rally. Watch for an hourly higher-high, lower-close to be the first sign of weakness.

After three days of consolidation, it looks as if the low at 1540.50 could be a trigger point for a quick sell-off. The first major downside target is an uptrending Gann angle at 1528.25.

Today is rollover day from the March to the June contract. Traders should be prepared for wild swings especially if volume continues to fall. 

S&P 500 Futures Forecast March 14, 2013, Technical Analysis

The S&P 500 futures market had a fairly quiet session during the trading hours on Wednesday, as we continue to bounce around just below the 1550 level. The resulting candle was a hammer, and this is the second one in a row at the very top of the chart. You control a resistive trend line on top of the recent move higher, so pullback would not be surprising. In fact, we would quite welcome a pullback down to the 1520 level, and would start buying at that level on the first signs of support. Alternately, if we managed to break the 1550 level on a daily close, we would have to start buying there as well. Selling is not an option at the moment.

 

S&P 500 Futures Forecast March 14, 2013, Technical Analysis
S&P 500 Futures Forecast March 14, 2013, Technical Analysis

E-mini S&P 500 Index (ES) Futures Analysis – March 13, 2013

The March E-mini S&P 500 is trading lower shortly ahead of the opening. Investors were likely lightening up their positions ahead of today’s important U.S. Retail Sales report. Economists are calling for an increase of 0.5% in February when the report comes out at 8:30 am EDT.

A better-than-expected number should drive the market higher and could do it in a volatile manner since trading has been light all week. Traders should look for an acceleration to the upside if 1557.25 is taken out with conviction.

Since the market has been posting higher-highs and higher-lows, traders should also be bracing themselves for a possible washout to the downside if this pattern is broken. This makes 1547.50 a possible trigger point. The daily chart indicates there is plenty of room to the downside. The nearest support is an uptrending Gann angle at 1529.75.

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

A break at this time is probably going to be welcomed by bullish traders who feel that the market is a little overvalued. Volume has been falling despite daily new highs. This is probably a sign that professional investors are selling the rallies. This sets up a potential bull-trap today if the report comes out bullish.

Once the report is history, the focus is going to shift to today’s close especially since the contract is getting ready to rollover to June. If a bullish report spikes the March E-mini S&P 500 higher then traders should watch for a possible closing price reversal top. This higher-high, lower-close formation typically indicates the start of a 2 to 3 day break. This late in the week, however, shifts the emphasis on last week’s close at 1549.25 because a close on Friday under this level will put the market in a weak position at the start next week. 

S&P 500 Futures Forecast March 13, 2013, Technical Analysis

The S&P 500 futures fell during the session on Tuesday, finally taking a rest from the relentless march higher. However, this market is most certainly positive, and we could see a move all the way down to the 1500 level that would be a simple pullback as far as the buyers are concerned. Because of this, we are willing to buy this market after a pullback, which could be coming now. We certainly wouldn’t sell this market until we break below the 1480 level, and as a result this is a “one way market.”

 

S&P 500 Futures Forecast March 13, 2013, Technical Analysis
S&P 500 Futures Forecast March 13, 2013, Technical Analysis