Forecast on Index Futures

Emini S&P (ES) Analysis & trade plan

Nov 18th 2016 Updated at 9:20 pm EDT on Nov 17th 2016

Again, Emini S&P is a boring sideways grind up and magically remains green! How much more consistently boring can this be? We recovered the previous day’s loss by holding support at 2170 region and climbing back up to 2185. Magical yet mystifying how many contracts go back and forth trading this each day – it’s unimaginable!

On the downside outlook there is minor support at 2171/70 but below 2168 we risk a slide to better support at 2163/62. If we chisel down further in the contracted range bound market, we target 2155/54. Below here, 2150/48 should again be an excellent short term buying opportunity.

For the upside forecast levels we are at a 2-day high near 2185 but I reiterate that the level most important yet seemingly elusive to this market is the all-time high 2189~2191.50. Closing above here despite the threats of an impending rate increase by the Federal Reserve Chair would sow the seeds of the next leg higher next week in the longer term bull trend. Targets: 2197/99, 2204/05 & 2211/12.

Cam Pivots for Nov 18th, 2016 (a tad bit higher from yesterday)

R3=2196.50 | R2=2191.00 || R1=2188.00 | S1=2181.75 || S2=2178.50 | S3= 2173.25

News related to Asian Markets in the Globex Session

Nov 18th 2016 Updated at 9:20 pm EDT on Nov 17th 2016

The dollar vaulted to 13 1/2-year highs against a basket of major currencies as U.S. bond yields rose, leaving Asian stocks vulnerable to potential rotation out of emerging markets to the United States. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.3 percent in early trade to hover just above its four-month low touched earlier in the week. It looks set to log its fourth straight week of losses. The dollar’s rise, however, was a boon for Japan’s exporter-driven Nikkei average, which rose 0.9 percent to a 10-month high.

On Wall Street, the benchmark S&P 500 index rose 0.5 percent to within a hair of its record high as bank stocks were boosted by bets on higher interest rates and consumer discretionary stocks were helped by favorable economic data and earnings. U.S. consumer prices posted their biggest increase in six months, while housing starts surged to a 9-year high and jobless claims fell to the lowest level since November 1973. All these data fit nicely into the current market’s theme that U.S. inflation is likely to accelerate under the new administration’s policies such as tax cuts, increased fiscal spending and more trade protection for domestic industries.

The 10-year U.S. Treasuries yield rose to 2.326 percent, its highest since January. The two-year U.S. Treasuries yield rose to a 10 1/2-month high of 1.058 percent. Rising yields reflect market players’ reassessment of the Fed’s policy path down the road, although Federal Reserve Chair Janet Yellen told the Joint Economic Committee of Congress on Thursday that Trump’s election has done nothing to change the Federal Reserve’s plans for a rate increase “relatively soon.”

Yet market perceptions have clearly changed, with money market futures pricing in about a 90 percent chance of a Fed rate hike in December. They are also pricing in one or more rate hikes next year, a sea change from before the election when they priced in a less than 50 percent chance of a 2017 rate hike, assuming the dovish Yellen would be extremely cautious in raising rates. The dollar rose to 110.34 yen, its highest level since early June. The euro slumped to $1.0620, a low last seen almost a year ago. The dollar’s index against a basket of six major currencies rose above its “double top” touched in March and December of 2015. The index now stands at its highest level since 2003.

Emini S&P (ES) Daily Chart Analysis

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