Market Overview

Watch These Technical Levels In The Futures Markets Today


E-mini S&P (March)

Yesterday’s close: Settled at 2711.50

Fundamentals: U.S equity markets struggled to hold gains late in yesterday’s session as technical selling pushed price action to a new intraday low. In yesterday’s Midday Market Minute, we said that a move below 2715 will invite further selling. The market is in a consolidation phase at the level in which selling picked up on February 2nd and 5th and we view this week’s price action as nothing less than healthy. The technicals remain a predominant part of the intraday tape and after recovering early yesterday on dovish comments from St. Louis Fed President Bullard, price action merely failed at the scene of the crime post-FOMC Minutes. Buoying the market is a reluctance in Treasury yields to extend gains. In fact, the 10-year has not even retested the FOMC spike to a high of 2.957% and is working to give back all gains on the week. The S&P recovered well overnight, trading to a session high of 2727.75, about 1% from its pull back low late yesterday. Equity markets in Asia have led the way with the Nikkei up 0.7% and the Yen seeing a little relief from its sharp rally yesterday on risk aversion. There is no major economic data on the calendar to finish out. We will be eyeing Fed speak; NY Fed President Dudley and Boston Fed President Rosengren are due at 9:15 am CT. Cleveland Fed President Mester who might see her role expanded at the Fed speaks at 12:30 pm CT. San Francisco Fed President Williams is due just ahead of the close at 2:40 pm CT. The Fed is due to release their semi-annual Monetary Policy Report today, ahead of new Chairman Powell’s testimony to Congress next week.

Technicals: After a weak last hour of trading yesterday, the S&P snapped back at the closing bell. Overnight price action reached a high of 2727.75, lower than yesterday’s peak of 2731. This is beginning to be a key area of resistance and is where the selling picked up post-FOMC Minutes. We began to reintroduce our Bullish Bias yesterday morning, noting that volatility is likely to continue but after pulling back 2% from the 2745-2747.75 area, we now see long-term value once again. Support this morning comes in at 2706-2708.50 and this aligns a couple levels but ultimately a trend line from Wednesday night’s low and yesterday’s low. A move below here could accelerate the selling back into 2692.50-2693.50, a level not traded below intraday; a move below here could open the door down to 2669-2671, our major three-star level in which we see tremendous value buying against. Ultimately, this consolidation pattern with marginal lows after such a strong rally last week is building a bull flag; a move out above resistance at 2745-2747.75 should be extremely bullish. However, a move out above 2754.75-2763 is needed to confirm.

Bias: Neutral/Bullish

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

Pivot: 2711.50-2715

Support: 2706-2708.50**, 2692.50-2693.50**, 2677.50-2682.50**, 2669-2671***, 2642.50-2645**, 2627**, 2616-2620***

Crude Oil (April)

Yesterday’s close: Settled at 62.77

Fundamentals: Crude Oil gained more than a dollar after the release of the EIA inventory report yesterday. It confirmed a surprise draw of 1.616 mb, a little more than API’s 907k. The products didn’t give the market much fuel to trade higher. In fact, neither did the production data which shoed a drop of 1,000 bpd because of Alaska. The lower 48 states added 10,000 bpd. Ultimately, this proved to be some relief to a bull camp who has been fearful as rigs quickly come online. Additionally, though it was no surprise imports dropped, the increase in exports is bearish. What acted as further support yesterday was the equity market on a stronger footing at the time of this release, Treasury yields seeing some relief and of course a weaker U.S Dollar. In yesterday’s Midday Market Minute, we said that we like positioning short up here, however, do not expect to be profitable ahead of the weekend but envision lower prices early next week. More jawboning from OPEC has been favorable to price action this morning. The Saudi Oil Minister said the market is rebalancing, the decline in inventories will continue and soft demand is transitory.

Technicals: A firm tape from yesterday has still yet to break out above major three-star resistance. We see this as a tremendous level that keeps the recent downturn intact. We expect price action to continue to flirt with this area of resistance through today but would like to see the bears regain an edge early next week to signal a failure on this test. First key support comes in at 62.20 and while a close below here could get the ball rolling, a close below 61.56-61.64 will signal a near-term failure.

Bias: Bearish/Neutral

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

Support: 62.20**, 61.56-61.64**, 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 1332.7

Fundamentals: Price action moved up firmly yesterday morning on the heels of dovish comments from St. Louis Fed President Bullard. The tape spiked at 7:30 am CT and the catalyst sure wasn’t Weekly Jobless Claims data at a new 45-year low. The Dollar is trading in a slightly subdued range below major resistance, however, a flat inflation read out of Europe has helped buoy its price action. With no major economic data on the calendar we look to fresh Fed speak to guide the session. aversion. There is no major economic data on the calendar to finish out. We will be eyeing Fed speak; NY Fed President Dudley and Boston Fed President Rosengren are due at 9:15 am CT. Cleveland Fed President Mester who might see her role expanded at the Fed speaks at 12:30 pm CT. San Francisco Fed President Williams is due just ahead of the stock market close at 2:40 pm CT.

Technicals: Price action in the April contract held key support at 1319-1321 throughout the week. This paves the way for a higher low and a solid technical setup off trend line support from the December low. Though price action in the April-only chart nudged the support line, the front-month chart was more concise. The tape is trying to hold back above the 1330.2-1332.1 level and a weekly finish doing so is a win for the bull camp. With the Dollar Index failing against major resistance at the 90 level, we are now upping our Bias to outright Bullish while managing risk to the downside.

Bias: 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 2.676

Fundamentals: Yesterday’s EIA storage report showed a bigger draw than expected at -124 bcf vs -120 bcf. Still, price action stalled to take out Wednesday’s session high and this clearly opened the door for the bear camp. With price action in the March contract depressed for the entire month of February, the expiration is now likely to keep Natural Gas subdued. Today is options expiration for the March contract. Weather remains very mild and storage draw expectations continue to reduce, this has also weighed on the market.

Technicals: We continue to believe there is value down just below 2.60. However, price action is struggling to put any sort of pressure on the shorts with a move out above first key resistance at 2.7247. The risk technically and fundamentally remains to the upside.

Bias: Neutral/Bullish

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 120’135

Fundamentals: Though there is no major economic data, a lineup of Fed speakers will be critical. Furthermore, the Fed releases their semi-annual Monetary Policy Report ahead of next week’s congressional testimony by newly appointed chairman, Jerome Powell. NY Fed President Dudley and Boston Fed President Rosengren are due at 9:15 am CT. Cleveland Fed President Mester who might see her role expanded at the Fed speaks at 12:30 pm CT. San Francisco Fed President Williams is due just ahead of the stock market close at 2:40 pm CT. Remember, yesterday we said that though the 10-year yield spiked on the FOMC Minutes to a new high, the 10-year futures price did not make a new low. This has opened the door for a reversal. Furthermore, dovish comments from St. Louis Fed President Bullard help buoy the market. Ultimately, speakers have not surprised to the dovish side much, its just that they have not sounded as hawkish as they have been in the past.

Technicals: Price action is out above our pivot level of 120’15-120’18 this morning. As discussed throughout the week, this is a level in which a move out above will begin to squeeze shorts. We are looking forward to today’s Commitment of Traders; after a new low late last week, we are likely to see record short positioning. If everyone has already sold, who is left to sell; the 3% barrier could be more than just psychological. Remember, we have major four-star support that has acted tremendously this week, the market is due for a consolidation higher. Considering all of this, we have upped our Bullish Bias.

Bias: Bullish/Neutral

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****

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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