The S&P 500 mini-futures (ES) followed through nicely on Tuesday’s bounce with smaller increase yesterday, and successfully held the price above the monthly pivot level with decent volume. It closed at 2109.25, a bit more than two points above the Wednesday close.
The June contract, ESM5, which we have been trading until now, is expiring next week, and today is rollover day, when traders switch to the next nearest contract, September (ESu5). The cash index (SPX) and the June contract are converging in price, but the September contract is trading about 8 points lower, which gives a hint about where traders think this market is headed.
Today
The rollover to the new contract will make for confused trading today. If you haven’t one this before, rollover day is a good time to take the day off, and come back on Monday when things have settled down a little.
The cash index has been testing an ultra-short-term selling signal in the 2112 area, and this area is a key line for today. As long as the index stays under it, Bulls will have to struggle to hold the price above 2101. If they fail the index has a chance to fall back to the 2095-96 zone again.
The September contract (ESU5) will be the front contract to trade today. A move below 2095.50 could lead the futures back down to the 2088-90 zone. But if ESU5 can hold above 2098.50-2100 it could push back up to 2109.25-12.50 to fill the rollover gap first before it pulls back down again.
