The S&P 500 futures have held up remarkably well over the past 24 hours or so. Last Friday’s lows near 1341/1342 have held up well yesterday and again overnight into this morning. That level is right also marks the top of the big up-gap dating back to June 29th, the day of the most recent (sort of kind of…in case anyone is keeping track anymore) Europe bailout news.
For today I am looking to short any drop below yesterday’s lows and buy any reasonable push above yesterday’s highs. Both moves would get the S&P 500 into a gap. See the gray marked areas on the chart.
On the upside my first target is 1362 as the gap fill from Monday morning and a second target on a longer-dated swing is as high as 1386 – 1390.
As an aside note, the Russell 200 and the transports have outperformed the S&P 500 thus far in July. As I tend to use the Russell and the transports as leading indicators I tend to favor the long side here for the very near-term of a couple of days to a week or so.