With Federal Reserve Chair Janet Yellen's testimony before the House and Senate out of the way, and little attention being paid to either Greece or China, we're left with a pretty quiet market that just keeps pushing a little higher each and every day. The day time-frame trading in the E-Mini S&P 500 futures (Es) has left regular-session participants a bit frustrated as intraday volatility has been very low. Equity traders, on the other hand, have had plenty to keep themselves occupied.
If we look at Thursday's intraday range on the Es, we find a four-handle value area (where 70% of the session's business was conducted), and total intraday travel of less than eight points. To be frank, that's about as boring as it gets.
If you're comfortable flipping over to the equity side of the market, there's been near-constant day time-frame activity in names like Amazon (AMZN), Facebook (FB), Netflix (NFLX) and, believe it or not, the oil refiners. Names like Tesoro (TSO), Valero (VLO) and Marathon Petroleum (MPC) have been consistently strong over the past couple of weeks. (Amazon is part of TheStreet's Growth Seeker portfolio. Facebook is part of the Action Alerts PLUS portfolio.)
On the bearish side of things, I trust everyone is well aware of the near-daily beatings in the oil service, independent drilling and major integrated names. But how about the semiconductors? Names like KLA-Tencor (KLAC), Applied Materials (AMAT), Fairchild Semiconductor (FCS) and Lam Research (LRCX) have had a rough go of it lately. (KLA-Tencor is part of TheStreet's Dividend Stock Advisor portfolio.)
If there are specific names you'd like a deeper look into, let me know. The names above are simply a starting point for those frustrated by the lack of regular-session travel in the Es contract. Because many of us get tunnel vision with our approach to trading the major indices, it's important to remember that sometimes the quiet nature of the indices fails to tell the whole story. There's plenty of volatility to be found. It's just not in the major indices.
Moving on to Friday's Es auction, we should begin by noting the contract tagged its May 19 to present day downtrend line on Thursday. While I wouldn't call the action near the trendline a rejection, I do believe it's fair to say price is overextended and overheated in the short run. Pressing long-sided bets through that trendline in the immediate term likely carries a bit more risk than most are willing to take on.
Thursday's auction closed displaying little bullish or bearish excess. Despite the session ending well in the black, the profile tells us the auction was somewhere between non-trending and balanced. We'll begin the session with an eye toward 2122 and 2113.25. Any early session drive higher would be expected to struggle in and around the low 2120s. A sustained dip beneath 2113.25 would be exactly what the bears need to open the door to continuation toward 2103.75.
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