Friday's E-Mini S&P 500 futures (Es) auction was another quiet one, with the contract trading only a bump over 1.0 million contracts over a 10.5-handle range. As compared to Thursday's auction, supply continued to build toward 2438 and was promptly shut off as prices probed the low-2430s.
Over a higher timeframe, traders can't seem to decide whether they want to auction prices above 2440 or break the market down through 2430 and finally make a run for the rising 50-day moving average near 2400. At this point, those taking a multi-day approach should probably view sustained strength above 2438 to suggest bulls are ready to take a shot at the June swing highs, while a close under 2430 to 2425 could finally trigger a bit of downside.
We haven't devoted much time to the iShares Russell 2000 ETF (IWM) lately, and for good reason. That instrument seems incapable of sustaining momentum in either direction for more than a day or two.
That said, after Friday's close above a shorter timeframe down trendline, I want to keep an eye out for bullish continuation. If demand follows price above $141, perhaps we can get a quick test of $143, or even a sustained push to new swing highs. A drop under $139.50 and the IWM is, once again, dead to me.
Moving on to Monday's Es auction, we'll continue to use 2438 as our upper resistance level, but we'll adjust our lower level down a couple handles, to 2430.50. While all trading within this zone is expected to be rotational, the way it was on Thursday and Friday, we'll look for a sustained break above 2438 to trigger follow-on buying toward 2444.75 and 2450.50.
Repeated failures to break above 2438 will encourage sellers to auction the contract toward 2430.50. And, sooner or later, they might muster the strength to break the contract lower.
A sustained trade beneath 2430.50 has the potential to drop as low as 2418.75 before a strong, responsive buyer considers rejoining the auction. However, those scalping on a very short timeframe should be on the lookout for a brief (and likely to fail) bounce near 2425.
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.