We didn't expect Monday's auction to produce much in the way of high volume or sustained volatility, and a generally quiet session is exactly what we got. All major equity futures contracts finished the regular session within spitting distance of their opening print. And volume, while not anemic, was on the light side. I believe we can all agree Monday's coast-to-coast solar eclipse won out over American productivity.
Based on Monday's lack of bearish follow, shorter timeframe traders will likely be stalking one- to two-day bounces in names still holding above recent support levels or higher timeframe moving averages. Those not scalping over a short timeframe, however, are apt to sit on their hands and await slightly higher prices to sell into.
A few well-known names trading near support to keep an eye on are Alphabet (GOOGL) above $900, Amazon (AMZN) above $950, Nvidia (NVDA) and Netflix (NFLX) as long as price remains above the 50-day moving average (MA, roughly $159), and Baidu (BIDU) as long as it remains above its 20-day MA. (Alphabet and Nvidia are part of TheStreet's Action Alerts PLUS portfolio.)
Yelp's chart is fairly straightforward. While some may be comfortable picking up shares within the $40.70 to $43.40 consolidation zone, my preference would be to wait for a break above $43.40. And as far as Paycom's chart is concerned, I'd be interested in trading the stock long as it breaks above $71.80 to $72.
The bottom line is that while the major index futures appear a bit precarious and numerous past momentum stocks have begun to display weakness, I believe a short bounce is in the cards. That said, I wouldn't getting married to my positions and I'd have hard stops in place in case any bounce gets immediately faded.
Moving on to Tuesday's Es auction, we'll begin the day using 2424.50 to 2425.25 as our day timeframe pivot. As long as we're trading above that area, our baseline expectation will be for a drive into the low 2430s, followed by at least a half-hearted attempt to test levels around 2437.50. If demand increases as price is advertised above 2437.50, 2445 to 2447 becomes our next upside target, but that's as far as I'd expect any bounce to extend. Put another way, we'll look to fade a rally into the mid- to upper 2440s.
A bearish gap beneath 2424.50 encourages sellers to remain active, as they focus their efforts on auctioning prices toward 2417 and 2410.25 to 2411.75. As discussed in recent notes, we'll look for any test and/or break beneath 2400 to trigger a more pronounced response from dip buyers.
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