Regular-session trading across all the major index futures and ETFs remained subdued throughout Wednesday's auction, as participants continue to lack the motivation to adjust their position by any meaningful degree ahead of the three-day Memorial Day weekend. As discussed in Wednesday's note, I see no reason to expect the currently anemic pace of activity to change prior to the long weekend.
As is always the case, stocks with their own specific news catalysts provided day timeframe traders with opportunities. Names like Chico's (CHS) and Tiffany (TIF) fell to pieces on extremely heavy volume, while Intuit INTU and Take-Two Interactive (TTWO) extended their already impressive year-to-date (YTD) gains, also on relatively heavy volume.
As far as our traditional momentum names are concerned, stocks like Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) , Alphabet (GOOG) and Tesla (TSLA) , all remain in bull trends, albeit with shrinking ranges and seemingly reduced interest. For those actively trading these names, it's worth noting Facebook popped back above its 10-day exponential moving average during Wednesday's auction, after spending the past five sessions beneath it. Any follow-through at Thursday's open would likely have traders targeting $151.60. Like all these momentum favorites, I can't see abandoning a bullish bias until they close beneath a 50-day moving average. (Facebook, Apple and Alphabet are part of TheStreet's Action Alerts PLUS portfolio.)
Several traders ask if there is any reason to anticipate a meaningful change in the horizontal grind of the iShares Russell 2000 Index ETF (IWM) , and unfortunately, I don't see anything to suggest a break from the $134 to $139 congestion is on the horizon.
As long as the IWM is stuck in its current range, traders have little choice but to try to fade the edges, buying into $134 or selling short into $139, and bank on the channel remaining intact. At some point, this consolidation will obviously break, but trying to pinpoint the exact time of such a break is as pointless as trying to pick the exact turning point in a bull or bear market.
Moving on to Thursday's E-Mini S&P 500 futures (Es) auction, we'll continue to expect intraday dips to be bought and new highs to be probed as long as price remains above 2398.75 to 2399.50. A sustained trade above 2404.50 has nothing preventing a continued upwards grind in value, so either embrace the slow upward trend, or make your way to the sidelines and seek opportunities elsewhere until value fails to follow price higher.
A failed trade from 2398.75 doesn't alter the bullish landscape all that much, but it does open the door to some quick selling toward 2394.25 and 2389.50. I've bumped up our short timeframe line in the sand a bit, but for now, I still see no reason to consider a bearish posture until the contract begins closing beneath 2383.50 to 2385.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS