Welcome to Extreme Investor Network, where we provide you with expert insights and analysis on the latest trends in investing. Today, we are diving into the world of e-mini futures contracts tied to the S&P 500 and the recent negative “outside day” patterns that have emerged.
What exactly is an “outside day” in the world of trading? This occurs when the range of a security’s price hits both higher highs and lower lows than it did the day before. In the case of a negative outside day, the security opens higher, reaches a new high, reverses course to trade to a lower low, and ultimately closes below the prior low or open. Chart analysts closely monitor these events to assess market sentiment and potential trend reversals.
In the past week, the e-mini futures tied to the S&P 500 have experienced their third negative outside day in a series of eight sessions. On Wednesday, the e-mini closed at 5,207.75, falling below the previous day’s low of 5,260.25. While some may view these outside down days as signals of a downward shift, chart analysts like Ari Wald of Oppenheimer remain optimistic about the longer-term upward trend in the market.
Tom Fitzpatrick of R.J. O’Brien pointed out that the futures were trading near their support level, with key levels to watch at 5,191.50 to 5,193 and 5,098, the e-mini’s 55-day moving average. Despite the recent outside down days, analysts like Will Tamplin of Fairlead Strategies believe that a strong up move would be needed to cause concern, especially given the recent consolidation of the SPX.
Last week, the e-mini posted a bearish outside week for the first time since January 2022, as rising Treasury yields weighed on the stock market. E-mini futures are electronically traded, cash-settled, and represent a fractional portion of a stock index.
As experts in the field of investing, we advise our readers to stay informed on the latest market developments and consult with financial professionals before making any investment decisions. At Extreme Investor Network, we are committed to providing you with valuable insights to help you navigate the ever-changing landscape of investing. Stay tuned for more updates and analysis on the latest trends in the market.
