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Fundamentals: Corn futures were under pressure on the back of spillover selling from the soybean market. Weekly crop progress showed that producers are now 90% through harvest, slightly behind the 5-year average of 93%. Weekly export inspections came in at 797,459 metric tons, slightly below the low end of estimates.
Technicals: We have been patiently waiting to buy our support pocket, which we have had defined as 360 ¼-363. The bulls want to see this hold through the week, a failure to do so could spark another round of selling. On the resistance side of things, there is some near 370, but the ultimate objective would be the top end of the range, closer to 375.
Resistance: 375 ½-379****, 386-387 ¾***
Support: 360 ¼-363***, 354 ½-356 ½****
Fundamentals: Soybeans took a hit yesterday after a failed meeting between U.S. and China leaders at the APEC summit. It was the first time since the summit started in 1993 that there was no joint statement of goals at the end o f it. All eyes will now be on the G-20 summit at the end of the month. Nothing is expected to come of that, but the potential for continued talks could add a premium. Weekly export inspections came in at 1,055,000 metric tons, within the range of expectations.
Technicals: Yesterday’s beat down broke prices down to our first technical support pocket, which we have had outlined for the last week as 875 ½-879 ½. This is a buying opportunity in our opinion, but the bulls need to see it hold to end the week. This is also a spot for bears to reduce. The next line in the sand for us comes in near 864-865 ¾.
Resistance: 892-893**, 900-906 ¼****, 932-935 ¼***
Pivot: 875 ½-879 ½
Support: 864-865 ¾****, 839 ¼-844 ½**
Fundamentals: Wheat rolled over yesterday along with corn and beans, despite a dollar that was under some pressure. Yesterday’s export inspections came in at 509,118 metric tons, a relatively strong number. Weekly crop progress showed that winter wheat is now 93% planted, behind the 5-year average 97%. Good to excellent conditions jumped 2% from last week to 56%.
Technicals: The market broke down below the psychologically significant $5.00 handle which led to additional pressure into the afternoon. Previous support now becomes first resistance. A failure to reclaim ground above here on a closing basis keeps the door open for a retest of the October 25th lows of 485 ½.
Resistance: 512**, 519-520 ¾***, 528-531 ¼***, 549 ½**
Support: 485 ½***, 468 ¼-473 ¾****
E-mini S&P (December)
Yesterday’s close: Settled at 2696.25, down 46.75
Fundamentals: Tech is under pressure again today and after the NQ lost 3.2% yesterday, it is down 1.5% overnight. Traders must keep a pulse on the big names; Apple lost 3.96% yesterday and is down 2% premarket and Microsoft lost 3.39% yesterday and is down more than 1% premarket. Since before its earnings in October we’ve called for Microsoft to be a leader, it now must show up. Amazon lost 5.09% yesterday and Facebook 5.72%; it will be crucial for each to stop the bleeding at a minimum. Amazon purely for its size and gravitational pull but Facebook because it has exacerbated sentiment with troubles on all fronts. Although we don’t find Facebook a true leader right here, right now, it must stop going lower. The global picture is a sea of red with Hong Kong and China getting hit the hardest. Overall, the market wanted to believe positive news on the U.S and China trade front last week, it was obvious in its rips higher following upbeat comments and the refusal to pare those gains as the story developed or deteriorated. Sentiment has shifted this week after U.S and China relations took a turn for the worse at the APEC conference over the weekend; last week investors wanted to believe in a positive outcome at next week’s Summit at the Summit but this week investors look to sell first and ask questions later. Adding to the mounting wall of worries has been the Federal Reserve. Yes, a less hawkish tone should certainly be supportive but now the market is questioning the budding 180 and focused on their calls for slower growth upon weaker outlooks from Apple and NVIDIA.
On the earnings front, Target is down nearly 10% after a miss this morning. On the economic calendar we look to Building Permits and Housing Starts at 7:30 am CT. We will also keep an eye on German Bundesbank President Weidmann who speaks at 9:00 am CT
Technicals: The tape is undoubtedly weak this morning after miraculously pulling off a settlement right at our 2696.25 level and barely trading higher than such after the reopen. This immediately brings our rare major four-star support in the mix at 2651.25-2653.75. What would regularly be a three-star level, we have upped to a four-star because it aligns with a crucial indicator that the S&P has not closed below despite the tremendous volatility this entire year. We still believe it is highly like the market looks to bottom this week and begin a December rally; buying the first test to this four-star level could be the start of such. Price action above yesterday’s low of 2671.25 will be crucial in stabilizing. Trader should also keep an eye on Apple, it is testing its own major three-star level at 182. Furthermore, traders must understand that the NQ has now taken out its October low and this adds to the uncertainty in timing a bottom. Lastly, the S&P has a trend line from the October low that it held through yesterday, it comes in at 2687 this morning; a close above here will neutralize the immense weakness.
Resistance: 2681.50**, 2687**, 2696.25***, 2708.75-2711***
Support: 2651.25-2653.75****, 2627.25-2633.25**, 2603***
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