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Good morning. Volume is not slowing down as much as I anticipated with yesterday’s 1.7 million traded mini’s but price certainly is slowing as it feels that it is winding up tight.
Last two days had similar price action, buying the open paid very small while buy the early pullback paid the daily range. With Globex volume slowing down (157K this morning going into 6:45 am CST) I am becoming less optimistic about buying opens except on smaller size but will try to continue to buy an early low.
At some point this week, I expect an early low to fail to hold but until it does I have to keep trading the trend, after all is it Jul Expiration week which tends to have positive stats. I am also thinking that the upside is feeling limited and I have become willing to find a spot or two above to fade this week on smaller size as I would think out of three remaining days that there will be one of each higher/lower/flat closes but I cannot say in which particular order.
Downside prices: 2145 (*) early downside risk marker/pivot followed by 2141 (*) below that I’ll watch yesterday’s RTH low at 2138 (*) then 2134 (**) and 2130 (**).
To the upside: 2147 (*) is a higher risk marker/ early pivot then 2149-50 (*) area which is yesterday’s high as well as my weekly risk marker referred to all week, then 2155 (*) which would be first target followed by 2160 (**) where I would expect gains today to be capped.
All the best;
Michael Blythe
Futures Strategist
Hamzei Analytics, LLC
Good morning. While risk/reward looks favorable for some 90+ dated puts on the equity index futures, the nearer term looks less inviting. Sure, most indicators reflect an oversold market, however on a micro basis, I am not interested in fighting this tape. Thus far, this summer has not seen a real volume slow down chop and now with Brexit out of the way the next 4-6 weeks could begin to slow down on a relative basis.
If it does, then shorting as a conviction will become increasingly difficult. Of course, with earnings season it’s possible that there could be some large volume down days that we must pay attention to from a less micro point of view but for the time being I’ll be limiting my short ideas to only accomodate low volume, range bound type trading days.
Levels I am watching lower are 2023 (*) Euro session Globex low and the overnight low of 2020 (*) the the 2016 (**) area from Friday’s midday low, which presents an appealing buy area 17 handles off the Globex high and then 2107 (***) that bulls will need to defend to maintain momentum.
Higher levels are 2129 (*) which is my early pivot, I feel very comfortable holding longs above this level as the 2133 (*) Globex high becomes first target followed by 2134 (**) which is the all time high on a continuous basis, next target is 2140 (**) and then the round 2150 (***) which will be an important weekly risk marker, partly due to some Fibonacci extensions that I only use when projecting prices never traded before.
I lean toward buying the open today, and letting it run as high as it will go or buying a pullback. With the economic calendar light and Globex volume closely resembling what recently amounted to range days, then if early volume is below the 20 day average for the first hour, I would consider a small short around 10-15 handles above the open if it matches close enough to my target areas.
All the best;
Michael Blythe
Futures Strategist
Hamzei Analytics, LLC
