U.S. Cash Open: Indices Under The Microscope

Uncertainty has been the theme in the U.S. markets this week. Hurricanes Harvey and Irma, as well as tensions with North Korea, have led many traders and investors to take a risk-off stance facing U.S. equities. The result has been tight ranges for the S&P 500 and chaotic trading for the DJIA.

The good news is we have opportune trading conditions in September E-mini S&P 500 futures.

Technicals

The September E-mini S&P 500 futures contract is due to come off of the board today, rolling to December tomorrow. This is important, as all positions will need to be liquidated ahead of today’s electronic close.

September E-mini S&P 500 futures, Daily Chart

After the post-Labor Day action, this market has traded in a tight range, stuck in heavy rotation. With rollover to December coming on, we should see further tightening.

A few technicals:

• Wednesday’s High of 2469.00 will draw participation in Monday's gap area.

• Robust support is present with the 20-Day EMA at 2457.00 and the Bollinger Band midpoint of 2455.00

• Wednesday’s low at 2456.00 is near substantial support

• A crossover of the MP/SMA is present. This suggests a bullish bias.

The Trade: As I stated earlier, I am looking for a rotational market today amid rollover. Fading the extremes is a great way to play consolidation back to a defined value area (2463.25). A buy at Wednesday’s low of 2456.00 or sell at Wednesday’s high of 2469.00 are solid entries for a 1:1 R/R scalp.

The key element to remember in this trade is that volumes will be diluted because of the coming rollover. In the event that a robust breakout does occur, a stop above Tuesday’s high or below the Bollinger Band MP gives us a solid way to manage risk.

As always, trade smart and for tomorrow!

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

Related Articles

10 Common Online Trading Mistakes to Avoid

2 yrs ago

Save

The Key to Trading Success: A Growth Mindset

6 yrs ago

Save

Using Visualisation to Improve your Trading Results: Part 1

7 yrs ago

Save

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments