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Skinny On The Mini for Friday October 20, 2017

Good morning,

Below is your Skinny On The Mini for today. Have a great weekend!

Chart: E-mini S&P 500 futures, Dec 2017 (TradeStation: ESZ17) / Friday, October 20, 2017 / 8:58 AM ET / 60-MINUTE CHART

PRIOR COMMENTARY:
Yesterday (gray vertical line) I wrote:
<<
During the overnight, futures weakened, pushing down below the initial short-term support at 2552.25. The fall continued, BUT it has stabilized at 2542.50, just one tick past the support I had called out at 2542.75 (gray dashed line). This price action also met support at the olive green trendline.

Remember, today (Thu Oct 19th) is a key timing point.

  • If futures remain below 2551.50, and push lower, this would expose the key 2539.25 daily swing low. If that support is tested and held, it would hint at the start of another leg higher on the daily chart. This would indicate that today’s key timing is for a swift correction as a potential buying opportunity in the bigger picture.
  • BUT, if support at 2539.25 is breached with force, I’d watch for declines to 2529.00.
  • If, instead, futures continue to recover from current levels and push above 2551.50, I’d expect further gains toward 2557.25. If this occurs, and futures push higher through 2557.25, this would also be in line with the “swift correction” scenario.
  • HOWEVER, if futures can’t get above 2557.25, then I’d watch out for another leg of weakness lower, likely into 2539.25.

I am presenting a lot of possibilities here because of today being a key timing point. It’s been a volatile pre-open morning. That volatility could extend into the regular session, such that more than one of these scenarios may play out. So it’s best to be prepared from all angles!
>>

RECAP:
As suspected, futures continued to trade in a volatile manner early in the regular session. However, after forming an intraday higher low at 2545.25, they accelerated to the upside. Futures played out the scenario laid out in third bullet from yesterday’s Outlook, pushing above resistance at 2557.25 (old intraday low) into the regular session close.

OUTLOOK:
During the overnight, futures confirmed the notion that October 19th’s key timing window might be providing a swift correction lower as an opportunity for buying in the bigger picture (daily trend). Futures extended to new contract highs, pushing above the following projected resistance levels:

2566.88 — 75% of 2059.50 (11/04/16 L) / 2390.00 (3/1/17 H) from 2319.00 (4/17/17 L)
2565.38 — 150% of 2217.00(12/30/16 L) / 2390.00 (3/1/17 H) from 2319.00 (4/17/17 L)
2563.63 — 175% of 2400.75 (6/29/17 L)/2486.25 (8/8/17 H) from 2414.00 (8/21/17 L)

The outlook is for further upside while above the 2562.25 – 2559.50 short-term support zone. If futures recycle strength and extend above the 2571.75 intraday contract high, the next upside target would be 2578.50. Beyond would promote 2600.13.

However, if the current corrective weakness off 2571.75 continues, and futures fall below 2559.50, I’d watch for a deeper pullback into 2552.00.

ES DECEMBER 2017 CONTRACT | KEY PRICE LEVELS

2600.13 — 162.5% of 2217.00(12/30/16 L) / 2390.00 (3/1/17 H) from 2319.00 (4/17/17 L)
2592.81 — 175% of 2217.00(12/30/16 L) / 2390.00 (3/1/17 H) from 2319.00 (4/17/17 L)
2585.00 — 200% of 2400.75 (6/29/17 L)/2486.25 (8/8/17 H) from 2414.00 (8/21/17 L)
2578.50 — 150% of 2217.00(12/30/16 L) / 2390.00 (3/1/17 H) from 2319.00 (4/17/17 L)
2574.31 — 187.5% of 2400.75 (6/29/17 L)/2486.25 (8/8/17 H) from 2414.00 (8/21/17 L)

Resistance Above

Support Below

2562.25 — Wed Oct 18 old high
2559.50 — intraday higher low
2552.00 — midpoint Oct 19 range
2545.25 — intraday higher low
2542.50 — Thu Oct 19 low
2539.25 — Mon Oct 9 low
2532.75 — intraday higher low
2529.00 — Wed Oct 4 low

TRENDLINE DESCRIPTIONS (VIEW FROM TOP OF CHART TOWARD BOTTOM)
Rising purple trendline: joins 2474.00 (Jul 20) and 2478.50 (Jul 27) highs
Rising olive green trendline: joins 2445.75 (Jul 18) and 2455.25 (Jul 27) lows

Falling pink trendline: joins 2486.25 (Aug 8) and 2477.75 (Sep 1) highs
Rising gray trendline: joins 2400.75 (Jun 29) and 2403.50 (Jul 6) lows
Falling red trendline: joins 2445.75 (Jul 18) and 2428.25 (Aug 11) lows
Falling black trendline: joins 2448.75 (Jun 19) and 2445.50 (Jun 26) highs
Rising orange trendline: joins 2339.00 (May 18) and 2424.00 (Aug 21) lows

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