E-mini S&P: Calm before the storm

Gold (COMEX:GCM14)

Gold prices continue to look weak following last Thursday’s spike down to a 61.8% (shown as 38.2 on the chart) Fibonacci retracement level. This volatile sell off made a new low on the chart, thus continuing to build lower lows in price. Despite a brief “pop” back above the 1300 pivot, price has again failed to hold this important psychological level and the intermediate-term directional bias appears negative. Given the current environment of the market, selling corrective rallies into resistance below the 1307.0 level appears to be one valid strategy to implement in today’s session. Local resistance can be seen around 1293.0 as well as 1299.4.

For those traders looking to play the short side of gold, the 1278.0 and 1269.5 support pivots could provide profit objectives for short-term trades in the gold market today. Despite the brief corrective pop in price action, momentum in gold still appear to favor a bearish argument below 1307.0 with an intermediate bearish bias below 1331.5.

Gold 30-minute Bar Chart (e-Signal)


E-mini S&P 500 (CME:ESM14)

Coming into today’s session, one may feel a “calm before the storm” sensation in the market as Wednesday’s session is going to play host to both GDP as well as FOMC Meeting Announcements. Despite initial weakness in stocks to start the day on Monday, the S&P 500 recovered nicely to close almost unchanged on the day. It would not be far-fetched to anticipate a relatively choppy, low volatility session today in the S&P 500 ahead of tomorrow’s big numbers. Traders should continue to monitor key techncial levels for potential trading opportunties today. The 1867.75 pivot seems to be a point of interest as of late with price action building a bit of rotational structure around this level on the chart. Given recent price action, there doesn’t appear to be a clear-cut “edge” in momentum, so traders must rely heavily on today’s intraday price structure and exercise strict position management. So long as price remains below last Thursday’s peak around 1882.00, price remains vulnerable to further corrective action.

E-mini S&P 500 30-minute Bar Chart (e-Signal)


Yen (CME:JYM14)

The yen has been trading relatively sideways with a slight near-term momentum bias. Following the local peak on 4/10, price has been in a low-volatility steady decline over the past few weeks and near the higher probability opportunity appears to be on the short side of the Yen. With that being said, a corrective rally off the 9744 and/or 9730 support pivots is a very real possibility today and could present traders with an opportunity to get short from a more favorable price level. So long as price remains below the 9813 – 9822 area on the chart, the negative momentum appears to remain in play. Furthermore, if price begins to “roll over” below 9740, then there is a very real possibility of seeing heavy selling pressure following this break in technical support, especially below 9730. If this scenario plays out, price will likely gravitate toward that 9700 pivot, targeting technical support around 9675 – 9685.

Japanese Yen 30-minute Bar Chart (e-Signal)



About the Author
Erik Tatje

Erik Tatje is currently a market strategist at RJO Futures and is the author of The Tatje Reporta daily technical correspondence. As a member of the Market Technicians Association, he has distinguished himself as a professional in the field of Technical Analysis and currently holds the Chartered Market Technician (CMT) designation. Erik can be reached atetatje@rjofutures.com or 312.373.5176. Learn more at www.rjofutures.com

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