The S&P500 mini-futures (ES) have now managed to rally for four straight days, fueled by a combination of nominally good earnings news in the US and an alleged debt deal for Greece. The futures closed at 2104.25, up 2.25 points from the prior close, on light volume.
The market has now recovered about 70 points from the overnight low made last weekend. Early overnight trading Wednesday night and early Thursday morning moved the futures up another five points.
We think the reasons given for this gusher are spurious; the Greek “deal” is mathematically impossible and some of the early earnings reports are textbook examples of enhanced accounting.
But the market can remain irrational a lot longer than you can remain solvent. So go with the flow, but stay suspicious. A lot of the “news” is the stuff that makes roses grow – even if the market likes it
Today
The Fed Chair continues her testimony to Congress today and the Jobless Claims are released before the day session opens. We expect the ES to stay at the current high level to wait for the SP500 cash index option to expire tonight.
2095-94.50 and 2088.75-86 will be today’s intraday support. As long as the ES stays above that level the odds favor the upside and buying on the dips will continue
A move above 2108 could start the ES grinding up, inch-by-inch. The short-term indicators approach overbought territory, but not extremely so. The daily 20ema line hasn’t crossed above the 40ema line to give a buying signal. However there is still a chance for ES to pullback to retest the 20/40 ema lines again.
Major support levels for Thursday: 2085-88.75, 2062-64, 2054-52, 2038-39, 2028-30;
major resistance levels: 2108-12.50, 2119.50-21.75
For more detailed market analysis from Naturus.com, free of charge, follow this link
Chart: S&P500 mini-futures (ESU5) July 15, 2015
