BrokersEDGE Futures Newsletter 11-21-17 Morning – ES, Crude Oil, Gold, Natural Gas, 10 year notes

E-mini S&P (December)

Yesterday’s close: Settled at 2582, regaining losses from Friday and Sunday night.

Fundamentals: The bulls have the edge as equity markets around the world are higher this morning with Asia leading the way. Hong Kong’s Hang Seng is up almost 2% and being led by Tencent. Despite a lower open and the political uncertainty, the DAX is up about .5% this morning and the Euro has stalled its biggest decline in a month. Comments from the ECB that they will only make small policy adjustments in the next year have likely buoyed markets in the region. Coeure speaks this morning at 9:00 am CT. Merkel is said to give parties the next three weeks to form a coalition. The S&P is on the path it began yesterday, grinding higher. Chicago Fed National Activity is due at 7:30 am CT and Existing Home Sales at 9:00. We look to a speech from Janet Yellen at 5:00 pm CT for clues on the priced in December hike.

Technicals: Price action has traded through resistance at 2585.75 and testing Thursday’s high. Yesterday put in a solid higher low against last week’s pull back and the bulls have the clear edge. Resistance comes in at the all-time highs and 2596; a close out above here could ignite the path to the next major upside target at 2633.50. First, we must see price action hold above resistance at the 2585.75 level.

Bias: Neutral/Bullish

Resistance – 2585.75**. 2594.50-2596**, 2600*, 2616**, 2633.50***

Support – 2582*, 2576.50**, 2567.75*, 2561.75-2562.25**, 2555*, 2539.25-2543***


Crude Oil (January)

Yesterday’s close: Traded more than 1% off the low to settle at 56.42.

Fundamentals: Traders ready for inventories to come into the picture today and early estimates are for a draw of 2.1 mb on Wednesday’s EIA report. Early weakness yesterday was due to comments from Russia as they eluded to not having decided on extending production cuts. We feel certain they will join, but are giving the Saudis some gamesmanship ahead of the next week’s meeting. We remain bullish into this but are preparing for the potential buy the rumor sell the fact trade.

Technicals: The tape pulled back to S2 yesterday before paring much of its losses and finishing above S1. Price action is hugging the 56.57 level while stalling against resistance at 56.71-56.94, a level in which the trade must get out above in order to attract fresh buying.

Bias: Bullish

Resistance – 56.71-56.94**, 57.92-58.14**, 58.97***

Pivot – 56.57

Support – 56.19**, 55.74**, 55.00-55.25***, 54.36-54.65**, 53.96**, 53.11-53.27***


Gold (December)

Yesterday’s close: Lost more than $20 on the session settling at 1275.3

Fundamentals: Gold got clobbered yesterday and though the initial appearance in the currency market was Euro weakness, we believe much of it was Dollar strength. Yields were higher, and the safe haven metal was liquidated, something that would not have happened in heightened political fear in Germany. It is interesting to note that some of the reaction in this regard could be attributed to Fed Chair Janet Yellen giving here letter of resignation to take effect upon the swearing in of Powell. Though it was unlikely she would stick around after the demotion, this now assures that her dovish voice will not be in the mix next year. Chicago Fed National Activity is due at 7:30 am CT, Existing Home Sales at 9:00 and Janet Yellen speaks at 5:00. Tomorrow brings Durable Goods and FOMC Minutes.

Technicals: Price action rejected the $1300 level and as the tape got weaker the weight of selling picked up. Yesterday was a combination of longs liquidating but also fresh short positioning. Normally, following such a weak session, the tape must bottom out first and this means make a lower low today. The 200-day moving average comes in at 1271.8 and this aligns with a near term trendline that forms from the October 27th low. Though there is support below here, the bulls must maintain a close above three-star support at the 200-dma. A close above first resistance at 1281.1-1283.2 will begin to neutralize this weakness.

Bias: Bullish

Resistance – 1281.1-1283.2**, 1289.5-1290**, 1298.4-1300**, 1308.4-1312.6**

Support –1271.8***, 1267**, 1262.8-1263.8**,1243.6*


Natural Gas (December)

Yesterday’s close: Lost 5 cents at 3.047

Fundamentals: Prices perked up a little from their slide yesterday on news that Nebraska approved the Keystone Pipeline but ultimately, we find ourselves lower this morning. This has been a slow bleed over the last week as we head into tomorrow’s storage report with the second withdrawal in a row excepted.

Technicals: Natural Gas futures are testing major three-star support head on at 2.984-2998 and we are viewing this as a tremendous intermediate to long term buying opportunity. A close below here will dent our hopes and risk must be managed.

Bias: Bullish

Resistance – 3.097**, 3.154-3.175**, 3.198-3.22***, 3.288*, 3.353***, 3.55**, 3.67**

Pivot – 3.035-3.051

Support – 2.984-2.998***, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****


10-year (December)

Yesterday’s close: Lost 7 ticks on the session closing at 124’22.

Fundamentals: Sellers came in full force yesterday and there seems to be no concern over the political deadlock in Germans. As we commented with Gold, Yellen’s resignation confirms the subtraction of her dovish voice at the Fed. The longer end, the 30’s are actually higher this morning while the 10s are near unchanged and the 2s and 5s are lower. The yield curve continues to flatten and at a very sharp pace over the last few weeks. Chicago Fed National Activity is due at 7:30 am CT while Existing Home Sales are due at 9:00. Fed Chair Yellen speaks later today at 5:00 pm CT.

Technicals: Price action is testing key support at 124’16-124’19 and a move below here will open the door for another half point of losses. Data will be important today but overall the treasury markets feels to be on a mission and that’s lower into tomorrow’s FOMC Minutes. The 30-year is about half a point form session highs, still this is something to watch, if it gets out above there it could drag the complex higher on a technical basis.

Bias: Neutral

Resistance – 124’31-125’015**, 125’07*, 125’19**, 125’255**, 126’01**, 126’15***

Support – 124’16-124’19**, 124’00**, 122’22-122’29*** 

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