Pre-Market Outlook - 6/15/2021 | Archimedes Methodologies

The Squeaker with a Hail Mary Pass

Today's Key Levels - S&P 500 Futures 24hr Data

The Micro Narrative

I only just realized that this discussion got stuck in the scheduler this morning and did not go out timely. My apologies. The information remains accurate – but the updates must have seemed a bit strange today without this base information.

After struggling since early May, the S&P 500 has finally achieved a definitive breakout, closing at new all-time highs on above-average volume. It would be nice to have a few more points on the board above the old highs, but sometimes we take what we can get. The important support identified yesterday held, though it was an explosive move in the last 30 minutes that catapulted the index through the resistance levels.

Before we celebrate too much, the market was carried to new highs by the Monsters of Tech – or FANGMAN+T as we sometimes reference the acronym for Facebook, Apple, Netflix, Google, Microsoft, Amazon, Nvidia, and Tesla. As pointed out yesterday, many of the economically sensitive sectors have rolled over below their 21-day lines. Partially, this is due to interest rate levels abating lately. So breadth on this run is less than perfect thus far.

The market’s job now is to stay above the breakout, maintaining the positive bias.

Today's Day Trading Plan

Our plan always starts with knowing our neighborhood. We need to map all key levels and trendlines we are likely to encounter today.

From there, we have to prioritize the levels we expect to be today’s inflection points – the so-called lines in the sand – so that we don’t end up on a side road. Obviously, some lines and levels are more important than others. It would help if you similarly mapped any instrument you trade.

Futures are just underneath yesterday’s high, and also 12 handles off of the overnight high, so we don’t fit the definition of shock and awe, but some fade may still be in the cards given where we are. In a fade, target the bottom of the single prints at 4238 initially and monitor for continuation.

Obviously, any failure of countertrend activity would be construed as bullish (WWSHD) if over yesterday’s high. As the S&P 500 index made the all-time high in an overnight session, we consider it less secure than regular session one. Auctions will usually not end this way.

As the market is contemplating the important FOMC meeting starting today with an announcement tomorrow, there is also potential for further balance. Never discount this outcome.

Friday is quadruple witching – so I likely will await tomorrow’s decision and look to trade on Thursday.

Yesterday’s low is my line in the sand today.

Good luck today.

A.F. Thornton

Pre-Market Outlook – 6/15/2021