The following report is the Opinion of Optimus Futures, LLC
S&P 500 Index
Emini S&P 500 index futures for December delivery traded in the weekly range of 2542.5 and 2574.5 and closed higher for the fourth consecutive week as continued optimism surrounding third quarter corporate earnings reports dominated market sentiment and pushed the index to new all-time highs.
The week was smooth to start off but a technology sector selloff produced a minor correction in the trend that soon resumed partially on the back of positive earnings from the healthcare and utilities sector, as well as technical support around the 2545 region.
Some traders continue to express their concern for a market bubble as the 30th anniversary of the 1987 stock market crash brings back foul memories, while many participating investors continue to bid the index higher on corporate earnings as a proxy for economic recovery.
Light Crude Oil
Light crude oil futures for December delivery traded in a tight range as high as $50.87 and as low as $52.65. The market closed higher for the third week in a row as bulls only just tipped over the bears for the week for a 0.7% gain.
The market exhibited indecisive choppy behavior as traders exchanged mixed views about the ongoing uncertainty surrounding Iran’s nuclear deal and the ongoing tensions in Iraq. Even positive comments from Mohammad Barkindo – OEC’s secretary general – about the “accelerated pace” of oil market rebound and reports of more American rigs being dropped this week couldn’t help keep the bullish momentum intact.
From a technical standpoint, the market entered the week straddled on a nice up move from the prior week but lost momentum very early on. Price hit the $52.5 resistance zone as the relative strength index meter encroached the overbought territory, pushing the price back down to $51.5 key support level that held the first time but broke later on to allow for more sellers to jump in to create an extended down move. The week ended by a sharp spike back up as price found commendable support at the 51.5 horizontal support and resistance level.
Gold resumed the longer term down trend again this week after last week saw a higher close on the precious metal. While signs of US economic recovery, upbeat corporate third quarter earnings and US tax reforms pull the equity markets and the US Dollar higher, interest in the ‘safe haven’ metal continues to decline.
Price for Gold December delivery futures hit a key resistance trend line around the $1300 mark where excessive selling sent the market back down into a slump. With a close below the immediate term support level (marked as ‘A’ on the chart) we may see price trickle further down to the $1260 low, or further.
The precious metal traded in a range of $1275.4 and $1281.5. The market closed at $1277.3, down 0.3% for the week.
Euro futures for December delivery traded in a range of 1.18945 and 1.17670 during a rather slow week of trading as the market tests the recently broken 1.18 major resistance level for potential support.
10-Year US Bonds Futures
December delivery US 10-year bonds followed interesting price action dynamics this week as much of the prior’s week pull back off the longer term downtrend was erased during this week, as sellers resumed their dominance.
Prior week’s close above the all-important 125’40 support and resistance flip would have ignited hope for buyers, but this week opened with little to no momentum to the upside as price trickled right back down under the critical level to resume the longer term downtrend.
Buyers tried another hand mid-week as price bounced off The 125.04 region that saw price hit the 125’30 mark before more resistance around that area helped restore short side momentum. Price made an impressive move nearly back down to the multi-week low around 125’45 only stopping just shy of it.
The trading range for the week was 124’50 to 125’47. For the week the market closed down 0.7%.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.