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

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
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.

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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.
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