To no one's surprise, Wednesday's trading volume in the E-Mini S&P 500 Futures (Es) was incredibly quiet. That said, the late-session surge above $2,071 did leave the bulls in an advantageous position, to break the market higher during Friday's holiday-shortened session.
For those trading on Friday, please remember that volume and liquidity will be on the low end, as equity markets close at 1 p.m. EST.
Friday's trade plan won't be noticeably different from Tuesday's or Wednesday's, except for the increased possibility of bullish extension. Our primary area of interest is expected to be $2,070/$2,071. As long as trade is sustained above that one-handle area, the odds will favor upside extension. Put another way, I can see no reason to be actively stalking the short side as value migrates into, and above, the low-$2,070s.
Failure to sustain a trade above $2,070 doesn't turn the auction particularly bearish, but it does portend a return to Tuesday's and Wednesday's balanced environment. Should demand prove inadequate to sustain a price break above $2,070, day timeframe scalpers would be expected to begin selling the contract back down toward $2,067 and $2,062.75.
For anyone that missed my post in the comments section on Wednesday, I liquidated the remainder of my First Trust ISE-Revere Natural Gas Index Fund (FCG) position. As you'll recall, a partial sale was made around $15.70 earlier in the month. But after failing to push above the 50-day simple moving average (and seeing the Relative Strength Index drop back beneath $50), I opted for the more conservative approach and sold the remainder of the position. While the stock is still trapped in multi-week balance, it's looking increasingly vulnerable to a downside break.
With the general lack of momentum in the index futures, day timeframe participants are actively searching for pockets of momentum. That momentum is currently being found in stocks like Facebook (FB), Twitter (TWTR), Bitauto (BITA), Ambarella (AMBA), and even old-line tech names like Intel (INTC), Cisco (CSCO), and Applied Materials (AMAT). Of the aforementioned stocks, I'd rather focus on names like FB and TWTR, which are just beginning to come back into favor, than on stocks like CSCO and AMAT, which have been rallying for the past few weeks.
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