Many traders are looking for a big bounce after yesterday’s huge decline in the stock market. I’m looking for more of a two steps forward, one step back move. The overnight session saw the E-mini S&P 500 contract (ESZ2) test support near 1387. The market traded to a high of 1397.50 and came back to break support at 1390. I like trading support and resistance levels today.
I like trying to enter near 1386, selling to exit from 1390-1392. If the upside move continues, watch for support to come in at that level and try and test higher resistance near 1396. If 1385 doesn’t hold, look for a test of the 1380 level. A break through that area could present us with another down day.
Today’s session should present us with many opportunities to trade.
Pick your entry points wisely and stay disciplined with your risk management.
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES. A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.
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