Risk On! But For How Long? Will The Fed Ever Taper?
ESZ3 Quadruple witching: Equities have been performing great and although we are seeing a slight pull back since yesterday's session, we believe this to be a sign of healthy profit taking. Remember today is quadruple witching day and traders have needed to roll positions yesterday and into this morning, the September contract halts trading at the 8:30 central cash equity open. With a very light day on the calendar look for volume to drop off late. However, we are looking for support at a new session low and a good buying opportunity at 1710.50. A close below here will be discouraging and signal a consolidation after such a bullish run. Major support comes in at 1704 and a close below there could signal a failure. Keep in mind that Chinese Manufacturing data does come out Sunday night and traders will be looking for (needing) positive data in order to maintain this immediate bullish momentum. Bears who do not buy into this move can look for a slight new high on the day against 1718.25 and use that as a selling opportunity.
Resistance - 1717.75-1718.25*, 1723.25**, 1739**, 1757****
Support - 1710.50*, 1704***, 1698.50**
CLX3- Brent breaks key level of $110 sending WTI lower: Crude Oil futures are trading more than $2 from yesterday’s highs. At least four major factors have played a role in Crude failing to follow through. The first being the obvious, the Fed's decision still is not permanent and a taper will come, Crude is trading more than $20 from the yearly low. Secondly, the Fed cut their growth expectations from 2.3% to 2% raising demand questions. Third, there is now an easing of supply concerns in the Middle East which immediately softens prices. Lastly, Crude was down earlier this week on news that the U.S and Russia have agreed on terms to dismantle Syria's chemical weapon supply, easing geopolitical concern in the market. With a close below 106.23-.36 yesterday the market is setting up for a correction. The session lows are 105.42 but we are looking for new lows and a test of support and recent swing lows at 104.54-.40. A close below this level will signal a further correction possibly building for a test to 100.
Resistance - 106.23-106.36***, 107.54-107.68**, 108.24-108.4***
Support - 105.40*, 104.54-104.40** 103.74-103.93***
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