Futures Commentary and Analysis
iiTRADERs Morning Call: S&P, Crude, Natural Gas, & Gold
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E-mini S&P (June)
Equity markets turned sharply higher yesterday. Call it a refusal to break down early in the week which gave the bull’s fire power. Call it envy from those who have missed out on strong rallies post-Brexit and post US election. Or even call it greed from those who are turning to the trade that made them profitable twice last year. Regardless, we head into this weekend with a tremendous amount of uncertainty from the French election. We should have a glimpse of the race by 7:00 pm CT, however, because of how tight it is expected to be, it will likely drag out as votes are counted. We have voiced for a while now that we believe Le Pen wins this election for the same reasons of the Brexit and Trump’s victory. Polls are not worth the paper they are printed on and Le Pen could be seen as a solid winner by that 7:00 pm hour CT. Furthermore, yesterday’s attack in Paris will help her cause. If this is the case, equity markets should see some sort of selloff on fear that France will leave the EU; but that might be too logical in what has been such an illogical market at times. The French election is not the only thing on the mind of investors, former Fed Chairman Alan Greenspan made comments yesterday that markets would soar on a repeal of Dodd-Frank. Furthermore, Treasury Secretary Steve Mnuchin completely backtracked on comments he made earlier in the week on tax reform, now unveiling that they are close to achieving this. He laughed as he said this, he knows he is lying. However, the administration is doing what they do in putting out the positive economic vibes, can you blame them; investors are taking it for face value. We may have some more clarity next week as there is expected to be a vote on Healthcare once again. We also have an ECB meeting and the first look at Q1 GDP. Today we have Manufacturing and Services PMI at 8:45 am CT and Existing Home Sales at 9:00. The 50 day moving average comes in today at 2353 and bears need to achieve a close back below here at the very minimum. Major three star resistance comes in at 2363-2367 and this aligns previous swing highs with a trend line from the all-time high; a close above here is bullish.
Resistance – 2356.50**, 2363-2367***
Pivot - 2353
Support – 2344.75**, 2340.50*, 2327.25-2332***, 2318***
Crude Oil (June)
Crude Oil near unchanged this morning and the door remains open for the bear camp. The market attempted to base and rally yesterday on news from the Saudis that a deal to extend production cuts is agreed upon and all but in place. This was a complete 180 from their comments earlier in the week when the market was $3 higher. Ultimately, traders called their bluff and the market has extended to a new swing low of 50.50. Price action remains near this level and ultimately this is great for the bearish technical setup. The 50 dma is edging eve close to the 200 dma for the Death Cross. However, the bears need one more psychological win, a close below the $50 mark to encourage further selling. Rig count data is due at noon and we have had 13 straight weeks of increases, further supporting the trend of production growth in the US.
Resistance – 51.38*, 51.70***, 52.10**, 53.46-53.63**, 54.00-54.14***, 55.52**
Pivot – 50.88
Support – 50.51**, 50.00-50.11***, 49.15**, 47.61***
Gold has edged higher in a very constructive manner this morning and with a session low so far of 1280 its set to put in consecutive higher lows. The metal has been building a base while not testing into major three star support at the 200 dma at 1266.5, we have now moved first support to 1273-1275.4; not retesting the 200 dma can be more bullish. Manufacturing and Services PMI data is due at 8:45 am CT and followed by Existing Homes Sales at 9:00. The Dollar has worked higher from yesterday’s low and Gold has held ground well. We believe the French election is keeping a bit of premium in Gold, however, we believe Gold can benefit from both a weaker Euro or stronger Euro due to the results; safe haven demand or a weaker Dollar respectively.
Resistance –1290.7**, 1300-1302.1**, 1309.3**, 1317.7**
Pivot - 1280.8
Support – 1273.3-1275.4**, 1266.5***, 1253.9-1254.7*, 1241.5-1247.3***
Natural Gas (June)
June natural gas futures are continuing to consolidate as we round out the week. Yesterdays EIA report showed that inventories rose by 54 billion cubic feet, this was larger than the range of estimates from 40-50bcf. This build is larger than the +10bcf we saw last week, the +7bcf we saw last year at the same time, and also above the five year average of +35bcf. Total natural gas storage is at 2.115 trillion cubic feet, this is 14.8% lower than levels seen at the same time last year, but still 13.3% above the five year average. On the technical side of thing, the market is in “no-mans land”. Technical support remains at 3.193 and resistance at 3.293.
Resistance-3.293-3.321**, 3.398-3.422**, 3.507****, 3.601-3.617**
Support –3.193-3.198****, 3.146-3.157**, 3.085-3.094**,3.002**
30 yr (June)
Resistance –154'15-154'21**, 156'14-156'16***
Resistance –18.24**, 18.49-18.54***, 19.00**
Support – 17.73-17.86***,17.46**,17.21**, 16.825***
Resistance –1.0777**, 1.0817**,1.0868**,1.0890-1.0911***
Pivot - 1.0725-1.0736
Support –1.0623-1.0630**,1.0548-1.0554***, 1.0430***
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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 iiTrader 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.