Chart Analysis and News for the Futures Market: Week of 12-11-2016

Chart Analysis and News for the Futures Market: Week of 12-11-2016


The Following analysis is the opinion of Optimus Futures

Consumer confidence hit significant highs last week as the positive effects of the post-election sentiment was still in full swing. Next week, the FED may make an important decision on interest rates, but a rate hike is already priced in by now. The most important fact about the central bank event will be what Yellen has to say about future policies. If the FED expects inflation to pick up significantly, they might raise interest rates faster than anticipated, which could be negative for stocks.

The S&P Emini closed last week at a historic 2060 which was close to the absolute high, indicating significant strength. Price is now in uncharted terrain and traders need to follow momentum and the general market sentiment. The FED decision could be a key event. To the downside, 2210 is a critical support area.

The CBOE Volatility Index jumped 5% last week, although the stock market rose throughout the week. The VIX could be used to hedge against losses and the divergence could indicate that investors are becoming increasingly cautious at those historic highs.

Emini S&P Futures Contract

After successfully retesting the resistance at 1190, Gold kept trading lower all week, nearing the next support area at 1110. If the FED continues to raise rates, we will most likely see a continuation of the heavy selling.

Price is trading between two stable levels – 1190 and 1110 – and there is little natural support/resistance to the left, which could keep the price from falling. It all depends on the fundamentals and the FED’s decision on interest rates this week.

Gold Futures Contract

The 30 year Treasuries sold off throughout the whole week as investors keep betting that the comprehensive fiscal policy under Trump will lead to a stronger economy, higher inflation and more rate hikes by the FED. Treasuries are also considered a safe haven market and the demand is fading during risk-on market phases.

Technically, the price is still moving lower with high momentum, with price just approaching the 147 level. Depending on the FED’s outlook this week, the selling can continue and push price lower into the next support at 143.

30 Year Old Bond Futures

On the weekly chart, we can see a huge rejection on the US-Dollar. At the beginning of the week, the greenback sold off strongly, retesting the 100 level before it completely reversed and closed back where it started. The volatility between the 100 and the 102 is increasing as uncertainty is rising and investors try to position themselves ahead of the central bank event.

Dollar Index Futures Contract

Saudi Arabia surprisingly announced that it is ready to cut its production next year. The commitment to re-balance the markets is probably putting an end to the concerns about the OPEC deal. However, Crude Oil didn’t see much of a reaction and price closed right at where it opened on Monday.

However, the news from Saudi Arabia should be enough to help price climb over the 52.00 resistance level and open the way to the next resistance which is at 58. Together with the positive economic outlook and good economic data from China last week, a rally in crude oil seems likely at this point.

Crude Oil Futures Contract

There is a substantial risk of loss in futures trading. Past Performance is not indicative of future results.


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