Crude oil futures have been selling off from Tuesday’s 72.90 to this morning’s 69.13 low as Saudi Arabia and Russia ease their output cuts. We highlighted crude oil last week in an article on this site, suggesting that the bullish trade was getting crowded and feeling top-heavy.
While we are not saying that the 2018 top is in for crude oil, we will be watching the $69.00 area as initial support and then 67.25 to 66.25 as pivotal long-term support.
Gold, which has sold off heavily this week down to 1281.50, has now rebounded the last few sessions and is facing heavy resistance at 1305 to 1315 area. If bears are going to control this market, they must defend that resistance zone.
Equity futures also suffered yesterday when President Trump withdrew from talks with North Korea. Right now, the 100-day moving average at the 2710 area is very important for the S&P 500( ESM). We believe that as long as that holds, there will be a push back up to 2740, and that above that, buy stops are lined up that will run the ESM up to 2750 and then 2775, leaving room to push up to 2800 in quick order.
However, a break of that 100-day moving average leads to 2680-2670 as the first downside target range. Right now, the Nasdaq and Russell 2K futures are outperforming the S&P 500 and DJIA. Therefore, while we base our technicals on the ES, we would like to be buyers of the outperforming markets for the upside.
Today’s economic calendar features the 8:30 and 10:00 a.m. numbers. While it’s a busy calendar, we do not expect anything to be market-moving. However, multiple Fed speakers are scheduled, and any of these could potentially elaborate on this week’s FOMC minutes, which would be worth paying attention to on a more macro level.
Otherwise, these markets remain news-driven. Updates about oil production, trade wars with China, potential tariffs on Japan, and new sanctions on North Korea will control the markets and affect price for days if not weeks to come.
- 2-Yr FRN Note Settlement
- Durable Goods Orders 8:30 AM ET
- Jerome Powell Speaks 9:20 AM ET
- Consumer Sentiment 10:00 AM ET
- Charles Evans Speaks 11:45 AM ET
- Raphael Bostic Speaks 11:45 AM ET
- Robert Kaplan Speaks 11:45 AM ET
- Baker-Hughes Rig Count 1:00 PM ET
- SIFMA Rec. Early Close 2:00 ET