MrTopStep's Mid-Week Equity View

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Yesterday marked the fifth day of weakness in U.S. equity futures. The Dow Jones Industrial Average Transportation Index, an index used as a leading indicator for the broader stock market by some analysts, was tremendously weak throughout the day. However, a positive sign was that the equity indices, including the lagging Russell 2000 index, succeeded in holding the prior day’s low.

Overnight both Asian and European stock markets have been mixed, and the U.S. futures are dragging lower this morning with the Nasdaq leading the day down 31.50 handles, or .44%, at this point. Today’s economic calendar features the 8:30 number, but nothing scheduled is likely to be market-moving.

What MrTopStep is watching for today to the downside is whether yesterday’s 2879.00 low from the regular session in the S&P 500 futures (ESZ18) can hold. If that price fails, the ESZ18 would target yesterday’s Globex low of 2874.50 and then this week’s low of 2866.00. A break below 2879.00 would mean we are less likely to buy today, and that if we do, it would be with smaller size.

One thing we want to watch for is weakness on the 9:30 EST open in the Russell 2000 (RTY) and/or Nasdaq futures (NQ) as they both have been the weakest during the early trade. We look for them to give us the best momentum to the downside.

To the upside, the ES has had a series of lower highs as marked on the intraday chart. The ES needs to rally above these up to the 2893 resistance area. If that price range fails to hold, then we would look next to the upper targets of yesterday’s high at 2900 followed by our weekly bullish target of 2907 to 2908, which mark last Thursday’s closing and Friday’s opening.



Today’s Economic Calendar:

  • MBA Mortgage Applications 7:00 AM ET
  • PPI-FD 8:30 AM ET
  • Atlanta Fed Business Inflation Expectations 10:00 AM ET
  • Wholesale Trade 10:00 AM ET
  • 3-Yr Note Auction 11:30 AM ET
  • Charles Evans Speaks 12:15 PM ET
  • 10-Yr Note Auction 1:00 PM ET
  • Raphael Bostic Speaks 6:00 PM ET


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