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March E-mini S&P Futures
Yesterday’s close: Settled at 2731, up 9.75
Fundamentals: U.S benchmarks are holding ground after a quiet overnight session. President Trump delivered a well put together State of the Union speech last night with no surprises. He pointed to the border wall battle with the Democrats, an FBI investigation and needing to see structural reform with China to get a deal. Speaking of such, U.S Trade Representative Lighthizer and Treasury Secretary Mnuchin travel to Beijing next week with the March 1st deadline for a tariff hike in focus. The hope behind a potential trade deal has kept a bid under this market. Yesterday, we said if you take a step back, not a lot has changed other than price over the last 30 days. The S&P is about 1% from its November closing level but despite the 16% drop and nearly 18% recovery from highs stop lows and back, the 10-year Treasury yield sits at 2.7% and has barely recovered from its fallout low of 2.54%. After tremendous volatility in October and through November, at that monthly close, the 10-year Treasury yield was 3.0%. Yes, the Federal Reserve has dialed down their rhetoric but for the 10-year to barely respond to such a recovery in equity prices certainly makes one understand that the problems are not fixed.
Today arguably marks the exit from the heart of earnings season. This morning, we look to a deluge of pharmaceutical earnings to accompany General Motors. Chipotle, Prudential and others are due after the bell.
On the data front, we look to Trade Balance and Nonfarm Productivity at 7:30 am CT. Tonight, Fed Governor Quarles speaks at 5:05 pm CT but it will be a speech from Fed Chair Powell at 6:00 pm CT that will be the headline grab.
Technicals: The tape is elevated, and we do feel there are some signs of exhaustion after this historical rally extended in the first-half the week. Most importantly, the S&P is nearing major three-star resistance at 2743-2743.50; this aligns a range extension from January with the continuous 200-day moving average. A range extension is a terrific indicator to signal that a breakout has run its course. For the NQ, this level is very similar at 7064.25 and aligns perfectly with its continuous 200-day moving average at 7054 to create major three-star resistance just overhead. Yesterday afternoon’s brief pullback found strong support in the S&P at 2719.50-2721.25; this will be a line in the sand today to keep the bulls in immediate-term control. For the NQ, this is a similar level at 699.75-7008 and aligns with yesterday’s settlement.
Resistance: 2743-2743.50***, 2751.25***, 2758.25-2763.50**
Support: 2719.50-2721.25, 2706-2709.75**, 2690-2695**, 2672.50-2677.75***,
March NQ Futures
Resistance: 7054-7064.25***, 7095**
Support: 6981.75*, 6933-6943**, 6858.25-6877.75**, 6810.50-6837.25***
March Corn Futures commodity
Yesterday’s Close: March corn futures finished yesterday’s session up 1 cent, trading in a range of 4 ¼ cents. Funds were estimated buyers of 7,000 contracts on the day.
Fundamentals: Corn continued to trade in it’s range yesterday as the market awaits new news, that will come in the form of a USDA report, Friday morning. U.S. production estimates are coming in and range from 14.343-14.760 billion bushels. Yield estimates are coming in from 176.5-180.0 bushels/acre. U.S. ending stocks are projected to come in anywhere from 1.621-1.787 billion bushels.
Technicals: If you read yesterday’s technical section, you can skip this one. The market continues to be a stick in the mud. Support and resistance pockets have remained intact for the better part of the last 3 weeks. We see that support coming in from 375 ¾-378 ½. On the resistance side of things, 382-384 ½. A breakout or breakdown opens the door for an additional 5 cents in short order.
Resistance: 382-384 ½**, 388-390 ½****
Support: 375 ¾-378 ½***, 371 ¾-372 ½****
March Soybean futures Commodity
Yesterday’s Close: March soybean futures finished yesterday’s session up 1 ¼ cents, trading in a range of 7 ½ cents. Funds were estimated buyers of 4,000 contracts on the day.
Fundamentals: Soybeans have been consolidating as we await Friday’s USDA report. Early estimates for U.S. production range from 4.490-4.620 billion bushels. Yield estimates range from 51.0-52.5 bushels per acre. The average estimate for U.S. ending stocks is near .925 million bushels. The USDA did announce a sale of 2,600,000 metric tons to China and another 274,000 to “Unknown” (likely China). This was good news but shrugged off by the market.
Technicals: The bulls and the bears are at a stalemate as we await a fundamental catalyst to help give the market a new technical direction. The market continues to hover around the 200-day moving average and key retracement from 919-921 ¾, a pivot pocket for us. First meaningful support comes in from 910 ¾-913 ¼. If the market breaks below here, we could see prices work towards 897-899 ½. This is a pocket where we would want to be aggressive buyers on the first test.
Resistance: 931 ¼**, 941-947****
Pivot: 919-921 ¾
Support: 910 ¾-913 ¼***, 897-899 ½****
March Wheat futures commodity
Yesterday’s Close: March wheat futures finished yesterday’s session up 2 ¼ cents, trading in a range of 7 ¾ cents. Funds were estimated buyers of 1,500 contracts.
Fundamentals: Wheat futures continue to chop around as we anxiously await Friday’s USDA report. The average analyst estimates for U.S ending stocks comes in at .989 billion bushels. Total wheat acres are estimated to be 32.128 million. We will be watching corn and beans close for the remainder of the week as it will likely spillover into wheat and provide a headwind or a tailwind for prices.
Technicals: The market continues to linger towards the top end of our resistance, a pocket that we have had define as 529-530. If the bulls can chew through this pocket, we would not be surprised to see a leg higher on the back of short covering. The next meaningful resistance doesn’t come in until 537 ¾-541 ¾. On the support side of things, 518 ¾-521 ¼ is the pocket the bulls need to defend on a closing basis.
Resistance: 529-530***, 537 ¾-541 ¾****
Support: 518 ¾-521 ¼***, 508-510**, 499-501 ¼****
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