Summer trading the S&P500 emini futures, support was hit today and the bounce could send the market to new highs.
As mentioned in last weeks article, the S&P500 emini futures have previously pulled back to find support in the last week of may and the first weeks of June. Today, we hit the support of 2068.75 in the overnight session and have bounced past the Point of Control at 2081 where the buyers are moved back in to control.
In a recent talk with day traders in Newport Beach. “Trade what you see, remember this is a widely held market and every time there has been a pullback or minor correction, the crazies will come out saying the sky is falling. The sky will fall when we have a 10% or more correction. Until then play the direction of the market. Trading is about being nimble.” Joel Wissing
This pattern where we have a double top or head and shoulders pattern gives us a small pullback or minor correction (less than 5%) has proven to be a continuation pattern in this widely held market.
Summer trading plan on a daily chart – major support has held.
The S&P500 reversal off of support at 2067.25 where sellers capitulated and buyers moved in is a key area of support. If you notice the buyers moved in and brought price above the 50MA at 2097 showing strength in this move up. This means the short term bullish trend is still in tact.
We have entered the next price projection zone (pinkish box) and are looking for it to move up, consolidate, and then break through the top either in the last quarter of the year of before the first week in August when we normally get a minor correction.
Downside projection this week was for the 2067.50 area, and the market is not showing signs of reversing off of today’s bullish move. If there is an outlier (read this from December 2014) that causes sellers to leave their widely held positions the next area to be tested will be 1960 for a full correction where we have an open gap.
Warning: Summer time trading can have very low volume and quick volatile movements. Always manage your risk first and don’t trade unless you know what you are doing. Only you can be responsible for your income, wealth and freedom!
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