Emini S&P 500 futures premarket analysis

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So what happened mid-day yesterday? A plan floated by Senate minority leader Mitch McConnell on Wednesday would extend the borrowing limit into December — providing respite but no long-term solution, and futures rallied off that news and are still look like they are in a daze unsure of what hit the short-term bear trend. Politics aside, it would not be difficult to fathom that this debt-ceiling fiasco could continue into the mid-term elections next year while none of the spending planned ever sees light of day. What this does to the markets which always sees reactionary trading with such news bytes is a consistent grind up. Let’s face it, despite all the negativity associated with vaccines, sentiment pushes markets and if populations in countries are not convinced of their safety, the economies will likely continue to misfire and struggle to keep pace. In the economic calendar for today the most important likely is the unemployment benefits in the week ended Oct. 2 are due out at 8:30 a.m. Recognize that these figures just report first time claimant information, and the consensus is that we will see a sizeable decline in the weekly numbers resulting in a robust monthly number for tomorrow. Valuation has drifted higher while yesterday’s RTH did see a drop from the previous session in terms of the point of control. This morning we are drifting higher on news so use gap rules wisely. Overnight participation is mixed and originates at about 4362.75 all the way into 4385.50 with some short participation in the move above 4394.

Thoughts for intraday trade positioning

  • Bias after yesterday appears shifting to the long side as futures remain marred by short-term investor sentiment. The ideal long trade originates between 4348.75~4373.75 in that 25-point wide range with a hard stop at 4248.25 while allowing the grind higher to tag 4412.75 as a potential profit target.

  • In an about-turn from yesterday where the long trade was a gap fill squeeze, today the short trade would be an attempt by the market to fill the gap which is unlikely. So if you are continuing with a short bias, look for the profit target from the ONH to yesterday’s settlement as a half-gap fill which may exhaust the move lower between about 4376~4366. Please avoid attempting shorts above the ON high as the ideal short would be placed in the upper 4380’s.

  • Gap rules apply as stated in the initial paragraph. Value is attempting to chisel lower and abandon the push higher caused by a bottoming pattern and oversold conditions in the Nasdaq index yesterday.

Key levels to factor for the intraday price movement

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TPO mapping

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