The S&P 500 mini-futures made a second inside day on Thursday, and closed at 2121.75, almost exactly on the previous day’s close. The market dropped sharply as soon as the day session opened, then worked its way back to the high of the day just before the close, aided by what has become a regular feature of the mini-futures: a price and volume spike in the last hour of trading.
The daily range is getting more and more narrow, and the volume decreased from the previous day. This feels like a market suffering from a lack of direction.
Thursday was essentially a consolidation move, probably related to the GDP report being released in the pre-market. There is a small triangle pattern being formed by lower highs and higher lows over the past six days; this is basically a continuation pattern.
Our change-in-trend day on May 26 made the low at 2096; if this turns out to be the low for the short term, the ES could easily rebound to a higher level before the next change-in-trend, which we are expecting around June 6.
Today
Today is the last trading day of May; it is also Friday and it is also the monthly option expiration day. In the early morning the GDP and other key economic reports could rock ES for a while.
2125 is a control line for any upside move. A move above it will eliminate the possibility of the month’s closing price pulling back down to the 2105 level.
If the GDP report this morning is better than expected, fear of an interest rate increase may return and knock the price back down to the 2100 area, especially if the ES does not move above 2125 in the early sessions.
For the upside, the ES may attempt to reach the 2134-36.50 area. However the option price indicates ES will not close above 2150 for the month even if the price attempts to move higher.
The major support levels for Friday: 2092-89, 2081.50-79.50, 2062-59.50;
the major resistance levels: 2134-36.60
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ESM5 Daily chart, May 29, 2015
