Rollover Day

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(click image to enlarge chart)

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Volume shifts from the September to December futures option contracts today with a difference of –4.75 points from ESU10 (September) to ESZ10 (December).

All previous chart numbers have been adjusted to reflect the new contract pricing—so, for example, yesterday’s key level of 1098.50 from the September contract is now 1093.75 on the December contract, and so forth.

We have a major bullish breakout this morning as the key resistance trendline at 1100.25 has been breached.  That brings the stops above the top of the current trading range at 1124.75 into play as the next likely upside target.

I have drawn in a light gray trendline that can act as a trailing stop guide for VST trades from 1035.75 (adjusted from 1040.50 ESU10 entry price).  A break below would be the first possible sign that a reversal might be developing.

There is no significant resistance between the current price and 1124.75, so we could see a quick move here.  An initial pullback would likely be stopped by a back-kiss of the breakout trendline, but if a hard reversal were to develop then 1102.50 could serve as a minor stop sweep/reversal setup.  However, if they go get the stops above 1124.75 before a significant pullback, then that line would become the next stop sweep/reversal line and I will talk about that more if/when price gets there.

All trends are up > 1082.75.

…my .02