Forecast on Index Futures

Emini S&P futures analysis for 11/11/16

Nov 11th 2016 Updated at 10:33 pm EDT on Nov 10th 2016

For Thursday Nov 10th – I’d offered the following analysis “If you happen to be short on that sell side story above at the trendline, make sure to have stops to reverse on good volume to longs at 2169 as it is likely that on continued buying tomorrow, we may be headed to 2173~2176 and even as far as 2181~2182 for a possible HOD print.”. Well what do you know, we topped exactly at 2181 in the intraday session today but then fell with the tech heavy Nasdaq to support and halted the fall barely 2 points above my “decent support” call in the 2145~2146 area.

The beauty of the analysis of these levels is not how accurately I can most times call it but in the happiness I derive from a subscriber to my report saying “Hey Murali – I took the levels in your report and placed my entries and exits accordingly and I am happy today because of what you did for me in that report guidance” Nothing gives me more satisfaction than hearing this from a subscriber today! It makes me want to continue delivering this to you unabated!

Emini S&P has that important 9-month trendline resistance at 2163 so holding below here appears less positive for today and we risk sliding not far down below to 2154 are and then some decent support in the 2146~2145 area which likely could hold the downside for the intraday initially on the first attempt. The best support for today however is in the 2134~2133 region and if I was trading this given that the market sentiment dictates going for the fence, I would try going long at this low intraday price print with a stop about 8 points below say at 2126. If you see volume driving to the downside and you get stopped out we may be headed to some minor support in the 2122 region and then excellent support 2114~2112. 

For the bullish read, we appear to have the bulls in total control. If we can hold above 2165~2166, like earlier today I would seek 2175 and a retest of today’s high at 2181. Above here on good volume especially with the bulls desire to close this election week on a positive note we are not far to test the important all time high 2189~2191.50. Closing above here tomorrow signals the start of a longer term bull trend which may dove tail into the “Santa Rally” and for the interim, targets 2199 then 2205 and 2212 in that order.

Cam Pivots for Nov 11th, 2016

R3=2197.75 | R2=2183.75 || R1=2175.25 | S1=2158.25 || S2=2149.75 | S3= 2135.75

News related to the US Market and a basket of currencies in the Globex Session

Nov 11th 2016 Updated at 10:33 pm EDT on Nov 10th 2016

Asian shares stumbled on Friday and emerging market currencies skidded as investors feared higher interest rates under incoming President Donald Trump will spark capital outflows from the region.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.4 percent as U.S. bond yields continued to soar on views that Trump’s spending plans will push up inflation, possibly triggering more aggressive rate hikes by the Federal Reserve. Emerging markets bore the brunt of selling, with Indonesian shares slumping 3 percent while the rupiah currency fell more than 2.5 percent to 4-1/2-month lows. The Mexico peso, sank to near its record low hit after Trump’s surprise sweep to power. Japan’s Nikkei bucked the trend, rising more than 1 percent to 6-1/2-month highs the yen weakened against the firming dollar.

On Wall Street, the U.S. S&P 500 Index rose 0.2 percent while the Dow Jones industrial average jumped 1.2 percent, smashing through its previous record high set in August by almost 1 percent. In contrast, the technology-heavy Nasdaq fell 0.8 percent, with Apple dropping 2.8 percent, hit by fears that Trump’s immigration policy could prevent Silicon Valley from attracting talent from around the world as it does now.

The financial sector surged 3.7 percent to its highest since the 2008 global financial crisis, as Trump has sided with leading conservatives in calling for the repeal of the 2010 Dodd-Frank Financial Reform Act largely opposed by banks. U.S. bond markets have also seen dramatic moves since Trump’s victory, with the 10-year U.S. Treasury yield hitting their highest levels in 10 months. Expectations that his policy stance – from protectionism and fiscal expansion – will boost inflation have been driving the surge in U.S. yields. The 10-year U.S. yield rose to 2.15 percent, almost 30 basis points, or 0.30 percentage point, above its levels around 1.86 percent just before the U.S. election on Tuesday. The 30-year yield rose 38 basis points, posting its biggest weekly jump since 2009 before a U.S. market holiday on Friday. Soaring U.S. yields have been a boon to dollar bulls. The euro dipped to $1.0908, compared to $1.1025 before the U.S. elections.

The dollar strengthened sharply against the yen, which has traditionally a strong inverse correlation with U.S. yields because higher U.S. yields encourage Japanese investors to buy more U.S. debt. The dollar rose to as high as 106.95 yen, its highest since late July, compared to around 105.15 yen before the elections. It eased back to 106.38 yen on Friday.

However, emerging market currencies were hammered by concerns investors could pull back their funds out of higher-yielding emerging assets and move them back to the U.S. Apart from the Indonesian rupiah, the Mexico peso has fallen 7.5 percent so far this week, hit by Trump’s threat to scrap the country’s key free trade agreement with the United States and build a massive wall along the border. The Brazilian real shed 5 percent on Thursday to a five-month low, while its benchmark Bovespa stock index slumped 3.3 percent. The South Korean won fell to its lowest level in more than four months on the dollar’s strength and concerns about Trump’s foreign policy and his commitment to security in East Asia.

Markets are expecting the U.S. Federal Reserve to go ahead with a rate hike in December after U.S. markets quickly stabilized from the initial Trump election shock. The money market futures are pricing in about 75 percent chance of a rate hike. In a remarkable shift of sentiment, the market is also now starting to price in a chance of a rate hike by the European Central Bank for the first time since 2011.

Emini S&P (ES) Daily Chart Analysis

es-daily-11-11-16

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