Market Overview

1937 On Tap For S&P

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Strong lows open the door to new all-time highs for the S&P 500, and acceptance above 1880 signals further strength to 1937.

ES Reaches First Target at 1893.25

In the May 6 edition of the Opening Print (Strong Lows Suggest Strength in the S&P) I wrote: “as long as 1860 remains intact price is likely to continue on an upward trajectory. Watch 1887 for signs of follow-through that could eventually lead the ES to the 1937.75 target we issued in February, with upside scaling targets at 1893.25 and 1904.”

The E-Mini S&P 500 futures [SPM14:CME] rallied through rejection at 1887 and proceeded to churn slowly higher the rest of the session Monday, ultimately reaching a new all-time high of 1894. In last week’s column, I wrote that if the ES held 1860, we would likely see price rally into our upside targets. The ES tested 1860 and got as low as 1854.50 last week before rallying into our first target at 1893.25 today.

Our next upside target is now 1907.50 (adjusted from last week’s 1904), and price also remains on track to reach my primary position target of 1937.75, which I wrote about in February. The 1937.75 ABCD measured move target has a completion target of May/June.

1880 is Key

While the ES has tested price levels above 1880 for three months straight, never once has price closed beyond 1883 … until Monday. This phase of expansion through the 1880s is significant, but the market must establish acceptance above this zone. Any pullback into the 1880s must be defended by responsive buyers, and any pullback as deep as 1875 to 1883 should be considered a swing buying opportunity, with upside targets at 1907.50, 1926, and 1937.75.

Failure to gain acceptance above 1880 signals rejection, and could lead to a swift retest of micro composite VPOC at 1866.25.

Short Term

Watch the prior all-time high at 1892.50 for early clues of directional bias. Failure to hold above this level offers a short-term selling opportunity, with targets at 1889, 1883, and 1879.75.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Futures Markets Trading Ideas

 

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