U.S. Indices Open In The Red For Second Day In A Row

U.S. equities markets continue to adjust to post-Labor Day conditions, featuring a flood of volume and consistent selling.

Written by: Dime Levov • Wednesday, September 5, 2018 • 1 min read

• Last updated: Wednesday, September 5, 2018

For the second consecutive session, the U.S. indices are trading to the bear. U.S. equities markets continue to adjust to post-Labor Day conditions, featuring a flood of volume and heavy selling. September E-mini S&P 500 futures are taking the brunt of the damage. Values have fallen more than 80 ticks, trending south since the Wall Street open (9:30 AM EST).

Earlier, the U.S. Trade Balance statistics for July came in as per expectations. The number stands at -$50.1 billion, growing by $4.4 billion from the previous release. In these times of trade war hysteria, slumping import/export metrics are being given extra respect by the markets. Today’s release is certainly wielding a bearish impact on the U.S. indices.

September E-mini S&P 500 Technicals

Heavy volume has been the early story for September E-mini S&P 500 futures. Over 715,000 contracts have already changed hands in what is rapidly becoming a trend day down.

September E-mini S&P 500 Futures (ES), Daily Chart

In the event prices continue to fall, here are a few support levels likely to come into play by today’s closing bell:

Support(1): 62% Retracement, 2873.50
Support(2): Bollinger MP, 2867.00
Support(3): Daily SMA, 2848.50

Bottom Line: At press time, the September E-mini S&Ps are trading just above the 2885.00 handle. For the remainder of the session, I will have buy orders from 2874.25 queued up and ready to go. This is a counter-trend scalping play, so a moderate 8-12 tick profit target and maximum 1:1 risk vs return ratio are warranted.

All in all, it has been a rough open to the trading week for U.S. equities. If we see a test of support at the daily 62% current wave retracement, a modest bounce to the topside is very likely.