E-mini S&P (June)
Yesterday’s close: Settled at 2615.75, down 46.75
Fundamentals: Monday was a great recovery but major three-star resistance at 2670 became tougher and tougher to hold as the day developed. Additionally, signs of yesterday’s selloff were budding through the session fundamentally and technically. Technology was lagging hard with the likes of Tesla and NVIDIA. Facebook continued to weigh on market sentiment and price. While there were positive sectors, the S&P traded to two significant lower peaks on the session versus the overnight 2679.75 and once the morning low of 2652.50 was taken out, there was nothing it could do to battle tech weakness. Monday did bring a breath of fresh air from trade tariffs but the U.S-China discussion is back in the headlines today; China is expected to release a list of U.S imports it plans to impose tariffs on. Given the immense weakness in the second half of the session yesterday, the market is taking this news very well. In fact, both the S&P and NQ have failed to revisit the sharp 2:30 pm CT low and instead have been constructive overnight around the closing range. On the positive side, North Korean dictator Kim Jong Un’s surprise visit to China has seemingly gone well with news that he promised to denuke as long as China remained friendly. Still, waves of selling have hit the market by 9:00 am CT and we have seen the gap from the previous session close get covered; traders should be careful buying rallies early into first key resistance at 2628. The final look at U.S Q4 GDP and its components are due this morning at 7:30 am CT. Pending Home Sales is actually the more important read because of previous GDP revisions and the dismal string of housing data. Tomorrow is the last trading day of the quarter and ahead of a three-day weekend where markets are completely closed on Friday. The Fed’s preferred inflation indicator, the PCE Index, is due tomorrow and will be a crucial read ahead of both events. Traders should keep an eye on some of the culprits as the session develops; Facebook, Micron and NVIDIA are all positive pre-market. Their gains are crucial for market sentiment and of course Apple and Amazon are just as important.
Technicals: The S&P has traded to a series of higher lows on each session since Friday’s 2586. The true barrier to what many believe is the abyss is the 200-day moving average which comes in at 2587.50 today. We tend to agree with this, if the 200-day moving average gets taken out and if price action stays just below for a few moments we are likely to see a windfall of selling that can take price action down to 2529-2544.75; this aligns the February front month March low with the smoothed 200-day. On the bright side of things, last night price action was extremely constructive. Yesterday’s sharp low was never retested, and the S&P has built positive momentum off 2600. First key resistance comes in at 2628, if this gets taken out intraday, we still need to see a close above here, but it will set a good tone into the end of the quarter. Major three-star resistance comes in at the scene of yesterday’s crime.
Bias: Neutral/Bullish
Resistance: 2628**, 2637.75**, 2647.75-2652.50***, 2670.50***, 2696-2696.75***, 2722.75***
Pivot: 2615.75
Support: 2596-2600**, 2587.50****, 2529-2544.75***, 2467-2488****
CORN (May)
Yesterday’s Close: May corn futures closed ¼ of a cent lower yesterday, trading in a range of 3 ¾ cents. Funds were estimated sellers of 1,000 contracts on the session.
Fundamentals: Not much new news on the wires over the last 24 hours as market participants gear up for tomorrows Prospective Plantings and Quarterly Stocks report. US Corn acres are expected to come in shy of 90 million acres. The quarterly stocks number is expected to come in around 8.710 billion bushels which is at the top of the charts for being one of the biggest for this March 1st report. Export Sales will be out tomorrow as usual. Keep in mind that it is a shortened week which also aligns with end of month and end of quarter, this could keep things interesting into the long weekend.
Technicals: With the market left near unchanged yesterday, there is not a lot to report this morning. We remain friendly on the market but need to see prices work higher into the weekend. We are spending more time than we would like at the bottom end of support. Bulls want to see a close back above the 200-day moving average at 377 ¾, but the more significant pocket to close above comes in from 382-383. A breakout above this level would give the green light to new highs for the year. On the support side of things, 368-369 is the significant pocket we have an eye on. A breakdown below here will not just neutralize the chart but turn the tide to bearish, this could encourage long liquidation from the funds.
Bias: Neutral/Bullish
Resistance: 378 ¾**, 382-383****, 393 ¾-395 ¼***
Support: 371 ¾**, 368-369 ¼***, 360-360 ¾****
SOYBEANS (May)
Yesterdays Close: May soybean futures finished the session down 7 cents, trading in a range of 14 cents for the day. Funds were estimated sellers of 3,500 contracts.
Fundamentals: As with corn, there is not much new news to report for soybeans over the last 24 hours; all the attention is on tomorrows Prospective Plantings and Quarterly Stocks report. Planted acres is expected to come in near 91 million acres. Quarterly stocks are expected to be around 2.030 billion bushels; like corn, this would be towards the top of the “all time” list for this report. Once we get this report behind us, all eyes will be on weather here in the states. Keep in mind that it is the end of the month and quarter which could lead to some position squaring from funds before the long weekend.
Technicals: The market continues to work its way lower as profit taking has led to some minor pressure. The bears are in control of the chart but need to see a close below 1006 ½-1009 ¾ to see a continuation of the downward trend. If the bulls can defend this level into the long weekend, that could set up for a bit of a relief rally next week. First resistance comes in at 1024 ¾, but the more significant hurdles come in well above that.
Bias: Bearish
Resistance: 1024 ¾**, 1038 ¼-1041 ¾***, 1049-1055****, 1070 ¼**
Support: 1006 ½-1009 ¾***, 1000 ¾**, 994 ¼**, 973 ¾-979 ¼****
WHEAT (May)
Yesterday’s Close: May wheat futures finished the session down 5 ½ cents, trading in a range of 8 ¾ cents. Funds were estimated sellers of 3,000 contracts for the day.
Fundamentals: Market participants are anxiously awaiting tomorrows USDA report where we will get new news that doesn’t revolve around weather. Tomorrows Quarterly Stocks report is expected to come in near 1.493 billion bushels, this compares to the 1.659 we saw last year. All wheat acres are expected to come in around 46.3 million acres. Export sales will be tomorrow morning as usual. Keep in mind that it is the end of the month and quarter which could lead to some position squaring from funds before the long weekend.
Technicals: The market worked towards the low end of the recent range in yesterday’s session as trader’s position into tomorrow’s USDA report. We have first support coming in from 446 ½-450, a break and close below we believe opens the door to accelerated selling pressure and a retest of contract lows and our next support pocket which comes in from 423 ¾-426 ¾. The bulls need to see a close back above 466-467 ¾, to get their footing back.
Bias: Bearish
Resistance: 466-467 ¾***, 494-495**, 516 ¾-518 ½***
Support: 446 ½-450***, 423 ¾-426 ¾****
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