• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Futures

Trader's Daily Notebook: Market Keeps Doing the Horizontal Flop

You can't blame weak earnings.
By BOB BYRNE Oct 26, 2016 | 07:00 AM EDT
Stocks quotes in this article: EW, CMG, AAPL, UA, SHW, WHR, GM, IWM

I'd love to blame Tuesday's regular-session decline in the E-Mini S&P 500 futures (Es) on the after-hours share-price declines of Edwards Lifesciences (EW) , Chipotle Mexican Grill (CMG) and Apple (AAPL) , but that's just not realistic. I believe it's equally unrealistic to say the regular-session weakness in shares of Under Armour (UA) , Sherwin-Williams (SHW) , Whirlpool (WHR) or General Motors (GM) were to blame. (Apple is part of TheStreet's Action Alerts PLUS portfolio. Under Armour is part of the Growth Seeker portfolio.) 

I believe Tuesday's lack of bullish price extension was simply another unpleasant reminder that we're trapped in a lifeless, directionless and horizontal auction. And while we all yearn for some inkling of an idea when this chopfest is going to morph into a clearer trend, the market's rarely that accommodating. 

Daily S&P 500 Futures Volume Profile
View Chart »  View in New Window »
 

Monday's close above the 21-day exponential moving average in the Es contract gave buyers some incremental hope that we might be able to string together a few positive days in row. We even entered Tuesday's auction with an eye toward buying a dip between 2138 and 2139. That dip, however, failed to attract a worthwhile buyer. And the contract ended up closing the session at 2138.50. The best we can say is at least dip buyers didn't get run over during the day timeframe. 

Away from the Es, I suspect day timeframe traders will shift their focus back toward the iShares Russell 2000 Index ETF (IWM) at Wednesday's open. Because while the Es continues to stumble each time it attempts to push toward its 50-day simple moving average (SMA), the IWM is less than a dollar from looking downright treacherous. An intraday break of $120 is an incredibly obvious line in the sand that I believe many participants have highlighted on their charts. If you want something a bit less obvious, allow the stock to close under $119 to $120 before coming to any bearish conclusions. 

Moving on to Wednesday's Es auction, day timeframe scalpers are expected to enter the auction focused on 2141. As long as price is holding beneath that level, repeated attempts to break beneath Tuesday's 2135.25 intraday low are to be expected. As Tuesday's lows are cleared, a door toward 2129.25 and 2123.25 to 2124.25 is opened. 

15-Minute S&P 500 Futures Volume Profile
View Chart »  View in New Window »
 

Given how unpredictable the day-to-day volatility has been, we mustn't ignore the obvious potential for traders to return Wednesday with a desire to bid prices higher. As price gains acceptance above 2141, we'll shift our focus back toward 2148 to 2150. As prices clear 2150, 2158.25 to 2160 becomes our next major objective. 

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

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Byrne had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Futures | Earnings | Markets | Stocks

More from Futures

Baltic Powder Keg? Telltale Treasuries, Cringy Congress, Lost in Fed Translation

Stephen Guilfoyle
Jun 23, 2022 7:26 AM EDT

Despite Wednesday's hit, XLE remains the only sector SPDR ETF still up year to date (+34.8%).

An Oversold Bounce Is Developing -- But Don't Be Too Trusting

James "Rev Shark" DePorre
Jun 21, 2022 7:35 AM EDT

Now is not the time to build longer-term positions.

How Far Down? Inflation Torment, Sign of Relief? Bewitched, Trading Chip Stocks

Stephen Guilfoyle
Jun 17, 2022 7:07 AM EDT

there was a high level of professional participation on Thursday and almost all of it was on the same side of the market.

Fed Reaction and Takeaways: The Statement, The Projections, The Balance Sheet

Stephen Guilfoyle
Jun 16, 2022 6:58 AM EDT

I have never seen a market downturn end on its own, without the Fed turning dovish as a catalyst or in response to some crisis-level situation.

If You're Freaked Out About Energy, Then Look Back to 2007

Carley Garner
Jun 14, 2022 2:30 PM EDT

That year we were in a similar situation of skyrocketing energy prices and stories of peak oil. My mom even bought a Prius. Instead of rushing out for a new electric car yourself, try this trade idea.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:10 AM EDT PAUL PRICE

    More Insider Buying in American Woodmark (AWMD)

    American Woodmark , which I've discussed here fr...
  • 08:55 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 10 personality traits of successful traders an...
  • 12:08 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10

    As a Portfolio Name Agrees to a Merger, Here's Our...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login