Market Overview

Watch Out For These Levels In The Futures Markets Today


The following analysis originally appeared on Blue Line Futures

E-mini S&P (March)

Yesterday’s close: Settled at 2698.75

Fundamentals: The S&P settled nearly 2% from its session high, reversing course sharply after the release of the FOMC Minutes. Price action extended gains initially after the release to a high of 2747.75, matching Tuesday’s session high and our first key resistance level. However, a slightly more hawkish rhetoric than anticipated pushed the 10-year Treasury yield to a new high of 2.957. It is important to note that the 2-year, 5-year and 10-year prices all did not make new lows.

While we have seen a marginal consolidation off yesterday’s low for each into this morning, this has brought support to the equity markets; the S&P traded to an overnight low of 2682 before regaining 2700. The Fed signaled staying the course on three gradual hikes this year, the concern for the equity markets is rising inflation equaling higher yields. The Fed upped their growth forecast citing tax-reform and consumer spending, most see inflation reaching their 2% target later this year.

Markets across the globe plated catchup; the DAX has lost about .67% and the Nikkei is down 1%. The ECB this morning did not bring much, they said too early to change their communication. However, St. Louis Fed President Bullard made dovish comments earlier today cautioning against too many rate hikes. Weekly Jobless Claims are due at 7:30 am CT. NY Fed President Dudley speaks at 9:00, Atlanta Fed President Bostic speaks at 11:10, Dallas Fed President Kaplan speaks at 2:30. There is a 7-year note auction at noon CT.

Technicals: Price action failed right at first key resistance late yesterday and the sellers showed up. Intraday, second key support at 2688-2692.50 held and we will be watching part of this level on a closing basis; a close below here will keep immediate-term pressure on the market.

With price action back above here this morning, a continued hold of yesterday’s intraday low will give the bulls an edge up to 2715 and 2722.50. We are now slightly reintroducing our Bullish Bias; though we are not picking a low here and we see volatility continuing through the session, we do see longer-term value once again. A continued close below 2715 will leave the market vulnerable to waves of selling.

Bias: Neutral/Bullish

Resistance: 2715**, 2722.50**, 2732.50-2733**, 2745-2747.75**, 2754.75-2763***. 2794.50-2796***

Pivot – 2701.75

Support: 2692.50-2693.50**, 2677.50-2682.50**, 2669-2671***, 2642.50-2645**, 2627**, 2616-2620***

Crude (April)

Yesterday’s close: Settled at 61.68

Fundamentals: Crude Oil sold off after yesterday’s settlement at 1:30 pm CT trading to an overnight low of 60.75. This came after the release of the FOMC Minutes and as the Dollar strengthened. Price action did see a short-lived bounce after the release of API data that showed Crude inventories at -907,000 when +1.3 mb was expected. Gasoline’s build of 1.468 was in line with expectations and Distillates saw a much larger draw at 3.563.

This could be seen as giving a very slight edge to the bear camp on today’s EIA data. Ultimately though, the market remains in a very technically defined range. The official EIA read expects +1.795 mb Crude, -.282 mb Gasoline and -1.46 mb Distillates. Estimated production must be watched as the U.S continues to add rigs. The Dollar trade will also be key; strength will add pressure while weakness will add support.

Technicals: As we said above, the market remains in a very technically defined range. Yesterday’s price action struggled to stay above the 61.58-61.79 pivot with first key resistance just overhead. Strong waves of selling upon early overnight weakness could not break through major three-star support at 60.76-60.84. Look for today’s EIA data to encourage a directional move, we continue to see value with the bear argument in the near term.

Bias: Bearish/Neutral

Resistance: 62.10-62.15**, 62.63-63.15***, 64.39**, 66.00**, 66.66-66.87***

Pivot: 61.58-61.79

Support: 60.76-60.84***, 60.28**, 59.59-59.71**, 58.99-59.03**, 57.26-57.95***

Gold (April)

Yesterday’s close: Settled at 1332.1

Fundamentals: Gold took it on the chin late yesterday after the release of the FOMC Minutes. Though the content was not much of a surprise, the path of least resistance in the Dollar has been higher in the very immediate-term and this opened the door for further gains. While the Fed signaled they were still on their gradual path of three rate hikes, upbeat comments on growth due to tax-reform and consumer spending and their 2% inflation target being achieved later this year supported the Dollar Index to the 90 mark.

We have a lot of Fed speak today to digest; first St. Louis Fed President Bullard warned of too many rate hikes slowing growth. Next up is New York Fed President Dudley at 9:00 am CT, Atlanta Fed President Bostic speaks at 11:10, Dallas Fed President Kaplan speaks at 2:30. Weekly Jobless Claims are due at 7:30 am CT.

Technicals: We remain long-term Bullish Gold though the market is going through a period of wide range consolidation. First key support at 1319-1322.1 has held and this would be key through today’s session as trend line support now comes in near 1325 and clinging to here will remain constructive. Regardless, we have tremendous long-term support levels below here that will bring great buy opportunities. A close above first key resistance will keep the market slightly better than neutral in the near term.

Bias: Neutral/Bullish

Resistance: 1330.2-1332.1**, 1343.2-1344.9**, 1350.2-1351.3**, 1367.8-1370***, 1377.8**, 1392.6***, 1432.9**

Pivot - 1325

Support: 1319-1322.1**, 1302.3-1309****, 1293.2***

Natural Gas (April)

Yesterday’s close: Settled at 2.681

Fundamentals: March option expiration is tomorrow and while the open interest has been in April, the volume has clearly moved too. Today’s storage report is 9:30 am CT and expectations sit at -120 bcf. This is predicted to be the last draw of over 100 bcf for the season and the recent warm front that brought temperatures above 70 degrees on the east cost has pared back expectations over the next two weeks. Still, price action has held well against a long-term value area. Shorts are likely taking profit at this area and ahead of today’s read and we maintain that a surprise weather scare is not priced in at all.

Technicals: The late January rally in the April contract never got out above the $3 mark, and this will be a clear line in the sand in the coming weeks; a move out above here will be bullish. First key resistance comes in at 2.7247 and price action traded to a high of 2.701 yesterday before backing off; a close above here will force some short covering.

Bias: Bullish/Neutral

Resistance: 2.7247**, 2.774**, 2.8233-2.837***, 2.983***

Support: 2.565**, 2.486-2.532****

10-year (March)

Yesterday’s close: Settled at 120’065

Fundamentals: Yesterday’s FOMC Minutes sent the 10-year yield to a new high of 2.957% but the price did not make a new low against last Thursday’s 120’01. The technicals as well as a psychological barrier near the 3% are what is supporting price action. Fed speakers today include NY Fed President Dudley speaks at 9:00, Atlanta Fed President Bostic speaks at 11:10, Dallas Fed President Kaplan speaks at 2:30. Weekly Jobless Claims are at 7:30 am CT and there is a key 7-year note auction at noon CT.

Technicals: An overnight bounce in price action has remained contained below the 120-’15-120’18 area; only a close above here will neutralize this weakness in the near-term. Major four-star support at 119’20-120 remains a critical area that nimble traders can use to buy against and sell bounces.

Bias: Neutral/Bullish

Resistance: 120’315-121’05***, 121’15-121’175**, 121’31-122**, 122’25-122’29***

Pivot – 120’15-120’18

Support: 119’20-120****

Posted-In: contributorFutures Technicals Markets Trading Ideas


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