Monday, June 20, 2016 Morning Comments by Michael Blythe @FairValueTrader

Good morning. Equity futures gapped higher to open last night as Brexit polls showed what seems to be a momentum shift and possibly now a majority of voters favoring to remain in the EU. I suspect from experience that index futures are going to be vulnerable to whatever headline, poll or statement that hits the wires this week, potentially leading to volatile price action. The economic calendar in the U.S. is fairly quiet this week, so the attention is on all Brexit-related matters.

This price action today will likely favor scalpers, but will present to difficulty for intraday position traders such as myself. In my morning plan, what I can rule out is attempting to sell perceived tops or buying perceived bottoms as a matter of conviction. Unless something significant comes to my attention intraday, I will only attempt to buy pullbacks within uptrends, and sell rallies within downtrends. I will use the cash session opening print, as well as the 0 sigma marker and simple higher highs/higher lows and lower highs/lower lows to define the trend.

Levels I am currently paying attention to on the downside are 2084 (**) as an early pivot marker, follwed by 2082 (*) then 2075 (*) followed by last nights 2072 (*) open, and Friday’s 2060 (*) close. These levels are wide, but after last night’s price action, I believe the more macro intraday levels are most reliable.

To the upside, last week’s 2089 (*) high, followed by 2097 (**). Again, micro support/resistance levels are not suitable today IMHO, and these may be considered levels of interest to watch or targets, more than outright support/resistance projections.

All the best;

Michael Blythe
Futures Strategist 
Hamzei Analytics, LLC