The month of August has been generally slow with sideways market action and headline news concerning the current Presidential office and key members leaving. The rally that we've had since the November 2016 elections has been of epic proportions and mainly built on the idea that the President was going to have key reform in the way of banking and taxes which has proven to be tough.
As with every first Friday we have NFP (Non-Farm Payrolls) data that traders rely heavily on for market sentiments. Usually this can begin to cause portfolio shifts and volatility and with the market at current highs and sideways it is, in my opinion, looking for any reason to sell off a few points.
Let's dive into a few key charts & data below starting with the Friday economic calendar.
The indices have been very sideways. The path of least resistance at this point is lower but it won't be easy. Key support levels lay just below.
S&P E-Mini Futures:
$2450-$2460 looks to be key resistance as we've tested the area three times and found sellers. A break of $2420 is key to get a flush lower and unlike the Nasdaq support is a bit lower and could be a smoother trade.
The weekly chart looks great. Short term resistance is at $1305-$1320 but bids above that should be free to run all the way to $1360-$1380.
The Powershares S&P500 High Beta ETF is a great way to track the momentum sector as a whole. One thing that was particularly interesting is that the trading range this year has been minimal. Since the Novemeber 2016 rally we've effectively traded in about a $3.00-$4.00 range. Could this be a sign for some of the high beta sector? Possibly and enough to mention in this weeks outlook.
The consensus is that markets here seem to be running out of steam. Now whether not it's a pullback to be bought can be discussed when we arrive but for now the upside opportunity on equities is not that appetizing. The positive is that the options and futures markets allow us as active-traders to capitalize on the market whether it goes up or down so bring it on.
Enjoy the trading week and be sure to subscribe on the right.