The S&P 500 via futures trading this morning is near the 7,530.00 ratio, on Friday the cash S&P 500 market closed around 7,473.00 and speculators today should expect whipsaw results.
Friday’s trading on the S&P 500 closed near the 7,473.00 mark before going into the Memorial Day weekend. Earlier on Friday the S&P 500 flirted with the 7,515.00 ratio before a slight selloff. However over the weekend news about a potential agreement between the U.S and Iran started to set off positive sentiment alarm bells. Yesterday’s futures trading in the S&P 500 saw a run higher and the 5,560.00 realm was penetrated.
However, over the past half day news developments from the Middle East and rhetoric from the U.S White House has become cautious and almost aggressive again. The S&P 500 has responded to the negative tones with some cautious selling in the futures market. When the cash S&P 500 opens in a handful of hours trading is definitely going to be fast and volatile.
Test of Financial Institutions’ Sentiment Coming
Day traders trying to take advantage of financial institutions and the momentum they generate may not want to step into the S&P 500 until the big players have reacted to the swirling sentiment that has been generated the past twenty-four hours. Perspectives will be tested immediately when the S&P 500 cash market opens particularly as all participants return from their long holiday weekend.
Trying to gauge what reactions will be exhibited may be able to be done via the prices of the energy markets. WTI Crude Oil is trading cautiously above $91.00 at this moment, this after a solid drop in prices yesterday. In other words, yesterday’s positive reaction in the markets via Crude Oil prices dropping has not translated into an extended fall in price, meaning caution prevails again. Thus, a reason the S&P 500 futures have opened with selling this morning.
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Velocity and Fast Results Likely Today
The S&P 500 may look attractive as a betting landscape for many day traders. However, solid risk management will be needed. The cash market volume upon opening today in the S&P 500 is likely to be massive and it will cause an impact to the futures pricing.
Shifting sentiment will generate not only fast moves in the S&P 500, but reversals also today.
And this is where it will get interesting, after yesterday’s buying on the futures markets, what will happen if the cash market opens with selling today?
Does that mean the futures market will react with a violent selloff and then react to support which comes from mid and long-term outlooks which are more positive?
Whipsaw trading could be produced today in the S&P 500 and retail traders need to be careful with their wagers.
S&P 500 Short-Term Outlook:
Current Resistance: 7,535.00
Current Support: 7,505.00
High Target: 7,555.00
Low Target: 7,465.00
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