As disappointing a day as Monday was for bulls, Tuesday's was equally frustrating for bears. The E-Mini S&P 500 futures (Es) opened Tuesday's regular session a few handles beneath Monday's close, immediately dropped five handles, but within six minutes was trading above the opening print. That sort of opening swing is brutal for traders looking for bearish continuation.
Before we get to Wednesday's Es auction, I'd like to address a few reader requests.
First on our list is gold futures. More of you are bullish than bearish on the yellow metal, but that's frequently the case. Unfortunately, the choppy though slightly down-trending price action that began in early July remains in full swing. As you can see on the chart below, there really isn't much worth doing until the contract breaks above $1,360 or beneath $1,305 to $1,310. The daily volatility makes the contract scalpable on an intraday basis, but those looking for a directional move probably need to remain on the sidelines.
Next up is natural gas futures, but since the requests all came from higher timeframe participants, I thought we'd take a peek at a weekly chart of the contract.
Last week's closing candle doesn't inspire a ton of confidence. The doji formation, exactly at the spot it needs to plow through, makes me think a bit more churning may be in the contract's future. However, over a higher timeframe, I love the way price is holding above the 21-week exponential moving average (EMA) and 40-week simple moving average (SMA). That, along with the Relative Strength Index (RSI) holding firmly above the 50-center line, makes me bullish on natural gas over the long term. I'd be interested in buying on dips and on strength above $3.
Last on our reader request list for today is the VanEck Vectors Oil Services ETF (OIH). This isn't an ETF I've followed too closely this year, but for those interested in the sector, it's trading at the lower end of a multimonth trading range.
If we consider all trading dating back to mid-January, the OIH is trading at the very bottom end of its widely accepted range. In a nutshell, if one wanted to place a bet on the range holding, a long entry between $25.25 and $26.25, with a stop under $24.50, would be a reasonable approach.
Moving on to Wednesday's Es auction, we'll begin the session with 2144 to 2145.50 as our primary area of interest. The inconsistent, back-and-forth price action we've witnessed over the past couple of weeks makes it difficult to look beyond a single session. However, we'll treat the mid-2140s as our directional pivot. As long as any early session dip does not extend beyond that general area, our baseline expectation will be for an eventual push past 2154 and bullish price extension toward 2162.75 to 2164.
A failed trade from the mid-2140s keeps the rotational torture in full effect, and encourages day timeframe scalpers to sell the contract toward 2138.25. Continued selling beneath that level shifts our focus back toward 2131 and 2123 to 2124.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at email@example.com or posted to my Twitter feed @ByrneRWS