The S&P 500 mini-futures (ES) made a new intraday high for the regular day session trading again Wednesday, but sold off immediately and closed at 2122.50 for a slight loss from the previous close. The volume was about normal for recent trading.
The ESM5 ran up 11 points in anticipation of the FOMC release after lunch, and made a new high at 2132.20, but gave it all back in the next hour. The sell-off stopped at 2119.25 — the previous resistance level — in the day session but continued to drop in the early after-hours trading.
The FOMC minutes showed little interest among Fed members for a rate increase, and the market is now convinced the Fed will not hike in June, and will delay at least until September and maybe until next year.
But the favorable season for stocks is ending, and “Sell in May and Go away” thinking encourages more buyers to lock in profit and walked away. The lack of upside momentum and sluggish volume didn’t support a breakout. Eventually selling at the top, which is what we saw in the past two days, pushed the price back down.
Today
Today 2119.75-2115 will be the key area. A move below 2114.50 level could trigger selling and push the price further down toward 2106-03 zone to test the psychological support at 2100.
Holding above 2114 could lead to a retest of yesterday’s high area, which will be a short entry for us. The 2134-32.25 zone could easily be the short-term top, and the swing short entry we have posted in our chat room for more than two months.
Major support levels for Thursday: 2103-06, 2092-89, 2081.50-79.50, 2062-59.50
major resistance levels: none
ESM5 Daily Chart. May 20, 2015
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