Tuesday's Market Minute: S&P Futures Struggle Amid Financial Sector Turmoil

S&P 500 futures have struggled recently after a roiling of the financial sector and a downside breakout through an upward trendline beginning with the worst yearly close for the contract during mid-October. The /ES is down about 15% since its yearly highs last March, but it certainly could be worse as the contract is also up about 12% since its yearly intraday lows on Oct. 13. Today looks to be providing a bit of relief for traders, as stocks are rallying after this morning’s Consumer Price Index report.

Price action during the past week has taken the contract below most of its major moving averages; the contract failed to break above the 21-day Exponential Moving Average on Mar. 6 and 7, and then fell below the 50-day Simple Moving Average, 63-day EMA, and 200-SMA in rapid succession. Today’s rally has so far not brought price back above any of these key metrics. However, price bounced around the yearly Linear Regression Line which sat near 3,880.

Volume also has been heavy recently, with four of the past five trading days showing trading activity far above the 50-day simple moving average of volume. This could speak to greater conviction on the part of traders. Momentum also does not favor the bulls right now, as both the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) are in the bearish end of the spectrum. 

For potential resistance, the closest of the major moving averages is the 200-day SMA near 3,950. For support, look to the yearly Linear Regression Line once again near about 3,880, and then the range lows from December around 3,800.

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