At a mere 11.25-handles, Friday's regular session E-Mini S&P 500 futures (Es) range was relatively narrow. But the consistent rejections from both 2129.75 to 2130.75 and 2123.25, two areas of interest discussed in that morning's trade plan, provided day-timeframe scalpers with plenty of trading opportunities. Yes, moving forward, I highly doubt Friday's narrow range will become the norm.
The coming week is expected to be all about the Fed. Unfortunately, I'm not sure traders, investors or even talking heads have any idea what they want the Fed to do. The two-day FOMC meeting begins on Tuesday and culminates with the meeting announcement scheduled for 2 p.m. ET Wednesday. And 30 minutes after the announcement we'll get the Fed Chief's press conference. While I have no idea what the Fed is going to do or say at this week's meeting, my expectation for the trading ahead of the meeting announcement is continued range-bound trading between the 2100 and 2156 extremes set on Sept. 12.
Before we get to Monday's Es auction, let's review a couple reader questions.
Several of you appear to be trading, or at least closely stalking, natural gas futures. This is a market we've covered several times over the past six weeks and just like the past couple times, I see reasons to be bullish. Top-side resistance on the natural gas chart below is fairly straightforward, so I believe we can keep things simple and say a close above the first green line is bullish and appeals to the aggressive initiative trader, while a close above the second amounts to a clean breakout.
Next on our reader request list is Freeport-McMoRan (FCX) . This stock is consistently one of the top-ten names I am asked about and nearly always on the long side. In any event, you can see on the chart below the stock is currently finding buyers in and around the 200-day simple moving average. Add to that the ever so slightly bullish divergence in the Relative Strength Index (RSI) and you've got a hint of justification to adopt a bullish trading posture. A stop under the early-April swing low (drawn in on the chart below) would be a logical safeguard from getting steamrolled in a stock not yet ready to bounce.
Moving on to Monday's Es auction, we'll begin the week with a focus on 2133.75 to 2135. As long as value remains beneath that 5-tick area the bears maintain a day timeframe advantage and have an open door to sell the contract down toward 2123.25, 2115.50 and 2108.
A sustained break above 2135 doesn't immediately alter the market's short-term trend, but it does encourage day-timeframe buyers to auction prices toward 2143.75 and 2150.50. But as discussed previously, we'll continue to be on the lookout for increased supply in and around 2150.50.
Any trading or volume profile related questions can be posted in the comments section below, e-mailed to me at firstname.lastname@example.org or posted to my Twitter feed @ByrneRWS