S&P 500 Extends Early Week Rally
If the recovery in September E-mini S&P 500 futures continues, a shorting opportunity may come into play later in the session.
The U.S. indices have extended early-week gains following the conclusion of the G7 Summit in Biarritz, France. Led by the DJIA DOW (+118), S&P 500 SPX (+15), and the NASDAQ (+44), stocks have opened higher amid growing positive sentiment. At this point, it appears the trade war panic of late last week is in remission.
During the U.S. premarket hours, several peripheral metrics facing the retail and real estate industries came across newswires. Here is a quick look at the hard data:
Event                                         Actual  Projected  Previous
Redbook Index (MoM, Aug 23)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -1.4%Â Â Â Â Â NAÂ Â Â Â Â Â Â Â -1.7%
Redbook Index (YoY, Aug 23)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 5.7%Â Â Â Â Â NAÂ Â Â Â Â Â Â Â 4.9%
Housing Price Index (MoM, June)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 0.2%Â Â Â Â Â 0.3%Â Â Â Â Â Â Â 0.2%
S&P/Case Shiller Home Price Indices (YoY, June)Â Â Â Â Â 2.1%Â Â Â Â Â 2.4%Â Â Â Â Â Â Â 2.4%
Although down month-over-month, the Redbook Index is still well up on the year, suggesting strength in the retail sector. On the other hand, housing prices continue to lag expectations as we enter the tail-end of the prime summer U.S. home buying/selling season. All in all, these figures suggest that American economic performance is being increasingly divided upon sectoral lines.
S&P 500 Opens On The Bull
Last Friday brought a news-driven selloff as both the U.S. and China elected to boost tariffs. The result was an intraday downtrend for the September E-mini S&P 500 as traders fled to safe-havens. Since then, the S&P 500 has regained more than 60% of the loss.
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For the rest of the session, here are two topside resistance levels to watch in the September E-mini S&Ps:
- Resistance(1): Bollinger MP, 2909.75
- Resistance(2): Daily SMA, 2911.25
Bottom Line: If the recovery in the September E-mini S&P 500 continues, a shorting opportunity may come into play. Until today’s closing bell, I will have sell orders in the queue from 2909.75. With an initial stop at 2913.75, this trade produces 16 ticks on a standard 1:1 risk vs reward management plan.
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