Syria Effect – Oil, Gold, SP500 market effects in to the holiday weekend as the UK snubs Obama and doesn’t go along with an attack on Syria.

Markets Consolidated after a brief sell off this past week.  The big question is what is going to occur over the three day weekend as the market closes on Monday for the Labor day holiday.

S&P500 Emini Futures Trading

S&P500 emini futures traders have pulled back as the market is trying to figure out what is going on with Syria. The over all market is also reacting to the alleged “Tapering” of Quantitative Easing.

We are looking at the potential forming of a Head and Shoulders pattern in the EMini Futures.

Projected High to complete the pattern would be to 1665-7, with sellers moving in to give us price failure from this resistance.  This would be a high probability reversal trade in the short term if there was capitulation in volume, noted by a volume spike about 1.67 times average.

The Scenario I am looking for on the S&P500 emini futures contract into the weekend is to consolidate at the 1631 – 1640 levels with a probable test of the support at 1614.

If sellers move in on fear of Obama single handedly attacking Syria, we might see a move to the second area of support at 1590.  Then a continuation of the general trend to complete the right shoulder of the projected Head and Shoulder pattern.

 Gold Futures Trading

Gold traders could be showing their bias as prices fell from their highs at 1447 back to 1400 and falling into a consolidated range.

Sellers moved in from Wed. as the UK was leaning to not join in on the Syria attack and triggered a retrace to support. The consolidated zone from 1390 to 1405 is a likely place for the market to close.

If there is some Saber rattling in Washington, I would watch for the move to the upside target 1411 and a move to the 1450 range if something actually were to occur.

It seems that economic Data has taken a back seat to all the international drama around Syria.  The next area to look at will be oil and how trading volume into this weekend has tapered off.

Oil Futures trading

Oil Futures have had a drop off in volume after reaching a high at 112.28.  If you notice it looks like we have capitulation on the buyers side with the volume spike.  This makes price above 109.55 unsupported as sellers drove the buyers off.  The move down is on lighter volume so there was not an escape from the market but a brief interim rest as price retraces to levels under resistance.

If Obama decides not to attack Syria this weekend I would watch for oil to see off to initial support of 103.75 and stall or if sellers have momentum then would watch for a break to the support at 98. If there is an attack, then I will be watching for an approach to highs at 112 then a break on panic buying if there is something substantial to 118.

Notice that presently, we are between support and resistance at 103.75 and 109.50 and if we wait on UN to determine the next step with Syria, probably mid week, then we will chop around between these areas.

Remember trading is high risk in the futures market and trying to guess the market is a fools game.  Take responsibility for your own analysis and only trade with money that you are willing to loose.

There could be a lot of volatility in the markets if something does occur and it might be best for the unseasoned trader to stand back and wait until the markets move back into trending patterns.