Despite Monday's bullish gap, very little has changed in regard to the near-term direction of the E-Mini S&P 500 futures (Es). It's nearly impossible to get excited when the Es begins the session 11½ handles higher than the previous session's close, yet only manages to close five ticks above that opening print. Perhaps traders will enter Tuesday's auction with a bit more energy. But from what I can tell, absolutely no one wants to take the lead in this auction.
Just how quiet was Monday's regular-session Es auction? Barely 750,000 contracts changed hands over a 7¼-handle range. While we all know how dead the trading in the Es felt, those figures really are quite anemic. So much so that my first thought was my data had to be wrong. Let's hope Monday's sleepy session was simply the result of equity traders joining fixed-income traders for a long weekend. If nothing else, the beginning of earnings season -- Alcoa AA reports before this morning's opening bell -- should provide a bit more consistent price action.
As far as individual stocks are concerned, there were pockets of bullish activity in names like Apple (AAPL) , Facebook (FB) and Salesforce.com (CRM) . And I've no doubt everyone saw the carnage in Twitter (TWTR) , Bristol-Myers Squibb (BMY) and Dover (DOV) . But aside from the handful of stocks with compelling chart patterns or company-specific news, Monday's auction across the equity complex was incredibly dull. (Alcoa, Apple, Facebook and Bristol-Myers are part of TheStreet's Action Alerts PLUS portfolio.)
Moving on to Tuesday's Es auction, we'll begin the session with a focus on 2158.50. As long as buyers continue to support prices above that level, bulls have an open door to test levels closer to 2164, and 2167 to 2168.50. Those currently fading the recent strength should tread carefully as value migrates above 2168.50. A sustained trade above that level has little resistance until 2178 to 2179.50.
As noted in Monday's column, I'm not particularly bullish. That said, I don't want to ignore the advantage bulls enjoy as long as price is holding above 2158.50. Now, if demand near 2158.50 evaporates, I believe we could see a quick slide toward 2148 to 2149.75. Beneath that roughly two-handle zone and we're back to targeting levels closer to 2138.50.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at parkcityyeti@gmail.com or posted to my Twitter feed @ByrneRWS
