The S&P 500 index futures (ES) finished Thursday with a solid gain and a higher close, fueled by good earnings from blue chip stocks, and the approval of the debt deal by the Greek legislature. The futures closed at 2117.00, 12.75 above the prior close, on modestly higher volume.
The futures have gained more than 80 points, or about 4%, since the low made in overnight trading last weekend. The only vote of non-confidence comes from the volume, which has been a little better than half of normal. Traders are extremely sceptical about this rally. But nobody is shorting it … yet.
Today
Friday will probably be wild. The ES could be entering a new rally cycle, and the price could be pushed up to retest previous high around the 2126-34 zone. The 10-day moving average crosses above 20- and 40-day moving average and gave a short-term buy signal. Any pullback will likely to be bought by new buyers.
2100-2095 becomes the first major support zone. The short-term indicators have an overbought condition, but intermediate-term indicators have just moved into their neutral area from oversold. They still have some room for the price to go higher. Early in the morning we may see a small pullback. As soon as the pullback move completes, later in the afternoon we may still see the price bounce.
Major support levels for Friday: 2085-88.75, 2062-64, 2054-52, 2038-39, 2028-30;
major resistance levels: 2119.50-21.75, 2128.50-29.50, 2134.50-36.50
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Chart: S&P500 mini-futures (ESU5) July 16, 2015
