E-mini S&P 500 Bulls Struggling to Sustain Rally

T-note Futures at "Tipping Point," Crude Tipping Lower

Bullish traders in E-mini S&P 500 Index futures are "struggling" to generate sufficient buying interest to overcome chart resistance at 1,450 to 1,460 and extend a four-month rally, technical analyst Robin Mesch said in a monthly report.

That resistance area will be "the next challenge for the bulls throughout October," the Oregon-based Mesch wrote in a monthly outlook. "Overcoming this barrier, though, will open a clear path for continuation toward 1,510." For sidelined traders, a potential buying opportunity awaits if E-mini S&Ps decline to 1,415 to 1,405, "a likely next bottom of the developing value range," Mesch said.

In 10-year Treasury note futures, Mesch said a fully developed bell curve "suggests this market is at a tipping point and ripe to move" out of a recent price range centering around 133 14/32 to 133 20/32. Her preferred strategy is to "stalk both buy and sell setups at the extremes of fair value."

Gold futures remain dominated by bulls, but "the potential reward in buying high so late in the advance does not outweigh the risk of an interim exhaust that could trigger a substantial pullback to the longer term bottom of value." In West Texas Intermediate crude oil futures, the market’s drop under $90 a barrel raises the odds for a further decline as low as $85.

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