The S&P 500 mini-futures (ES) are the major trading vehicle for overseas traders who want to gain or hedge exposure to US equity indices. So the trading overnight, when overseas markets are active and US markets are closed, can often run counter to US markets.
That’s what happened Wednesday night and early Thursday. The ES ran up 30 points overnight, then promptly dropped 30 points in the US trading session, to close at 2041.25, two point above the previous close. That conforms to the current pattern: the market travelled through 60 points of movement, and ended with two points of change.
There is lots of external uncertainty, from China and Greece in particular, and the emotional swings are causing whipsaw moves. And it isn’t done yet; as soon as the Thursday overnight session opened the market rallied 20 points in an hour.
Today
The weekly options expire today, and there is lots of activity around the 2050 strike, which is close to the yearly pivot and an important short-term support area. The 2050 level is acting like a magnet that pulls the price back when it moves too far away.
2075-70 should be the ceiling and 2035-30 should be the bottom for today’s price moves. The 2050 line will be a battlefield with the price moving back and forth across that line. The lowest low made on Thursday or Friday this week should be the low for next week – unless we get more news that disrupts the natural movement. And we probably will.
Major support levels for Friday: 2028-30, 2018-21, 2006-03, 1980-75;
major resistance levels: 2062.50-64.50, 2075-2078, 2085-86, 2093.75-95.50
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Chart: S&P500 min-futures (ESU5) July 9, 2015
