Futures news and research – BrokersEDGE Newsletter – 2-14-19

March E-mini S&P futures trading news and research
Yesterday’s close: Settled at 2749.50, up 4.75
Fundamentals: U.S benchmarks have erased what was a marginal wave of selling into yesterday’s close. The NQ led this profit taking lower while the S&P held ground the toughest through the session and never turned red intraday. January Trade Balance data from China last night bounced back from a dismal December read. This coupled with regurgitated trade headlines have reinvigorated the tape ahead of today’s December U.S Retail Sales read. First, President Trump is now willing to extend the March 1st deadline by 60 days if there is progress from the talks in Beijing this week. These meetings between higher-level representatives began today and we won’t rant again today about what “progress” really is. However, we remind you that we doubt any true “progress” will be made. Now that China can get the deadline extended almost into midyear knowing that 2020 is an election year here in the U.S, what motivation do they have in giving up practices that they erected ‘Made in China 2025’ around.
Congress is expected to vote on a bipartisan spending bill today. This will send it to President Trump’s desk ahead of the midnight Friday deadline. Coca-Cola is down about 3.5% this morning after earnings and NVIDIA delivers after the bell. This morning QoQ Q4 GDP from Germany was the latest miss from Europe, but the DAX is in the green focusing on Trade Balance and trade out of China. December U.S Retail Sales and PPI are due at 7:30 am CT and Philadelphia Fed President Harker speaks at 10:00 am CT.
Technicals: The NQ struggled to hold major three-star resistance yesterday at 7054-7064.25, finishing at the lows of the session and leaving a tail after failing at this level that aligns with the continuous 200-day moving. Today’s is priming for another critical test to this level. The S&P is testing strong resistance at 2758.25-2763.50 which is the November 30th settlement, meaning it has erased all of December’s losses. The March 200-day moving average comes in at 2753.25 and the S&P did not close above here yesterday, meaning it still has not. To the downside both the S&P and NQ provided a direct hit to major three-star support at 2743-2744.75 overnight, these are the lines in the sand today, we believe the selling can pick up below here. Our narrative continues to be one that believes this market is in a state of irrational exuberance and needs a healthy 5% correction that holds in order to prove the December sell-off was simply a fluke.
Bias: Neutral/Bearish
Resistance: 2758.25-2763.50**, 2790.75-2796***, 2814-2819***
Pivot: 2753.25
Support: 2743-2744.75***, 2729.50-2731**, 2721.50**, 2706.25-2709.25***

NQ (March)
Resistance: 7054-7064.25***, 7095-7101***, 7139-7169***
Support: 6994.75.75-7018.50***, 6959.25-6969**, 6905.50-6916.75***, 6858.25*, 6810.50-6837.25***

March Corn futures commodity trading

Yesterday’s Close: March corn futures finished yesterday’s session up 1 ¼ cents, trading in a range of 2 ¾ cents.
Fundamentals: Corn futures managed to grind higher in yesterday’s session but lacked any conviction on the back of a light news wire. Yesterday’s weekly EIA ethanol report showed production at 1.029 million barrels per day, this was up 62,000 barrels from the previous week. Weekly Export Sales this morning came in at 460,000 metric tons for the week ending January 3rd, this was below the low end of estimates.
Technicals: Yesterday’s tight range did little to change the technical landscape over the last 24 hours. The market is running out of momentum against the 50 and 100 day moving average, we listed that in yesterday’s report as our pivot pocket, coming in from 378 ¾-379 ½. If the bulls can chew through this pocket, we would look for an extension towards the top end of the recent range from 382-385. The top end of the range also contains a key retracement, the January highs, and the 200-day moving average.
Bias: Neutral/Bullish
Resistance: 382-384 ½**, 388-390 ½****
Pivot: 378 ¾-379 ½
Support: 371-372 ½***, 367 ¼-368 ½****, 354 ¾****

March Soybean futures commodity trading
Yesterday’s Close: March soybean futures finished yesterday’s session unchanged, trading in a range of 6 ¼ cents.
Fundamentals: No new news on the trade front led to a tight ranging trade yesterday. We will continue to keep an ear to the ground as meetings are expected to take place today and tomorrow with U.S. and Chinese trade representatives. Weekly export inspections came in at (612,000) metric tons for the week ending January 3rd, yes a negative number, thanks to cancellations from China and “Unknown”, which is likely China too.
Technicals: Soybeans have traded on the 200-day moving average for 15 of the last 15 sessions. From a technician’s perspective, we want to see the market break away (up/down) from the 200-day moving average. First technical resistance today comes in from 920-922 ½. A breakout above this pocket could extend the market towards the February highs of 931 ¼. On the support side of things, the bulls MUST defend 899 ½-901 ¾. This pocket represents the 100-day moving average, previously important price points, and trend line support which was tested and held at least once in the previous 6 months.
Bias: Neutral/Bullish
Resistance: 920-922 ½***, 931 ¼**, 941-947****
Support: 899 ½-901 ¾****, 890 ½-891 ¼**, 880 ½**

March Wheat commodity futures trading
Yesterday’s Close: March wheat futures finished yesterday’s session up 1 ½ cents, trading in a range of 5 ¼ cents.
Fundamentals: Wheat has been a lack luster market recently as market participants search for a catalyst to give them more conviction on a direction. Winter weather moving through the Midwest has been a concern for some, mostly those looking for affirmation. Though we think the risk/reward is favorable to the buyers, we are aware that winter months bring colder weather, so nothing to write home about there. Export sales this morning came in at 131,000 metric tons for the week ending January 3rd, below the low end of expectations.
Technicals: On the technical side of things, not much has changed. The market has been trading in wider ranges intraday but finishing closer to unchanged for the last 4 sessions. Must hold support for the bulls comes in from 508-510. A break and close below here opens the door for a run below the psychologically significant $5.00 handle. On the resistance side of things, our pocket from 522 ¼-525 held perfectly yesterday. This is still the pocket the bulls want to chew through on a closing basis. This pocket represents the 100-day moving average, Friday’s highs, and the original breakdown point from Thursday.
Bias: Neutral/Bullish
Resistance: 522 ¼-525***, 531-532**, 537 ¾-541 ¾****
Support: 508-510**, 499-501 ¼****

March Crude Oil futures trading
Yesterday’s close: Settled at 53.90, up 0.80
Fundamentals: We expect tailwinds from Saudi Arabia pledging to cut production March to dissipate by today’s close if not already. We expect the market to now focus on the IEA’s call for global supply to drastically outpace demand. Furthermore, we expect the slightly bearish EIA from yesterday to also work itself into the tape. Crude Oil was higher overnight on the heels of strong Trade Balance data from China, but this does not encourage China to cave on the backbone of their Made in China 2025 plans in order to get a trade deal done. All in all, we are outright Bearish in Bias and see value in the $54 region. Traders want to keep a pulse on the broader risk-sentiment through equity markets and Treasuries. Today is options expiration for the March contract.
Technicals: Major three-star support comes in today at 52.95-52.99 and this is a level that the bears want to see Crude trade below. We believe this brings sellers to the table. The landscape remains very technical and price action could not settle above first key resistance at 54.02 and then failed an overnight extension at second key resistance.
Bias: Bearish
Resistance: 54.02**, 54.63-54.68**, 55.51-55.55***
Support: 52.95-52.99***, 52.58-52.64**, 52.30*, 51.05-51.33**, 50.63-50.84***

April Gold Commodity futures trading news and research
Yesterday’s close: Settled at 1315.1, up 1.1
Fundamentals: Gold is well off the overnight lows on the heels of an awful December Retail Sales read that contracted. Furthermore, the third miss in a row on weekly Initial Jobless Claims. The Dollar Index is struggling against its March contract highs and weakness on this front will directly support the metal. Yes, yesterday’s session was absolutely disappointing; Gold failed at key resistance head-on and finished the electronic session 1% from that level. However, today’s reinvigoration fundamentally cannot go ignored, we remain unequivocally Bullish in Bias Gold.
Technicals: Gold is battling back at our pivot of 1312.9-1315.4; above here the bulls hold the near-term cards. As we were worried on the second test to major three-star support earlier in the week, the metal ripped higher from there. After failing at first key resistance, last night’s third test did see what was below, trading to a low of 1304.7. However, it is great to see a response from support and the bulls defend the $1300 region. We need to see a move out above first key resistance at 1321.7-1323.4 in order to invite additional buying to the table.
Bias: Bullish/Neutral
Resistance: 1321.7-1323.4**, 1337**
Pivot: 1312.9-1315.4
Support: 1306.3-1306.5***, 1300.5**, 1281.5-1284.5***

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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

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