The following Commodity Futures Market Analysis is the opinion of Optimus Futures. Click on the charts below to enlarge it.
S&P 500 Index
Emini S&P 500 index futures market for the week continued to build on the strong bearish momentum last week, although some sharp periods of buying – in the latter half of the week – did not allow the market to close at a strong bearish note for the week.
Straddled by the rising trend line (refer to chart above) price is showing signs of a bullish rebound – following the strong period of selling leading from the week prior to the last one.
The current volatility for this market keeps us from calling a short term target for this market, but we are looking at 2500 and 2400 price levels and support and resistance zones as potential targets if the bearish momentum continues. However, looking at the weak close on Friday, we suspect some buying activity in this market cannot be entirely ruled out for this week either.
Light Crude Oil
Light crude oil futures market for the week pushed lower as part of a broader weakness across a wide range of markets leading from the selloff in the US stock indices last week.
The market failed to sustain the bullish momentum we had seen develop over the past several weeks as the 66 price level held as firm resistance allowing a major bout of selling to dominate much of last week.
Notably though, the pullback from last week has the market sitting at an interesting location which hosts the former resistance at the 60 round number price level as well as a rising trend line and a former breakout point of a short term wedge pattern (refer to chart above). All these factors combined could make for a potential support zone for price allowing for buyers to potentially again dominate proceedings.
However if the broader market weakness continues week, we may also see more sell side activity in which case the identified areas could turn into resistance and push price lower toward the 55.00 key former resistance level.
Gold commodity futures also took a dip the last week as the false breakout from the week prior to last one fueled more bearish activity.
As we had anticipated and called for, we have price rapidly moving toward the 1300 round number that also lines up with a key support and resistance for this market. Leading from the false breakout and an immediate pullback to confirm resistance off the 1350 price level, the likelihood of sustained bearish activity was high.
This week, we suspect price will inch closer to – and perhaps test – the 1300 key price level. Depending on how price behaves as (and if) price hits this level, we could either see prices much lower or a rebound potentially back toward the recent swing highs.
Euro currency futures for the week were mostly bearish as price failed to penetrate the high of the bearish pin bar candlestick pattern that was printed the week prior to last one, in an attempt to nullify it.
We had been anticipating the continuation of the uptrend in hopes of seeing the market inch closer towards some key long term horizontal support and resistance levels for price at the 1.27 and 1.28 price points.
Instead, we witnessed the market valuing the 1.25 resistance, as price pushed lower to close strongly bearish for the week. We suspect that if the bearish momentum continues to hold strong this week, we may see price eventually hit the former highs marked on the chart above, and possibly even the 1.2000 big round number.
10-Year US Bonds Futures
The 10 year US Bonds futures market over the past week showed a strong uptick as the broader weakness in the US equity markets lead to significant gains in safe haven US government bonds.
We had been overtly bearish for this market after it broke down under the key support area around the 122.50 level. That level in fact held as strong resistance for bulls as price pulled back this past week.
We have had a short bias for this market but we have also been noticing a key consolidation box and a potential source of support for this market at 121 and lower price levels. This level pens down technical reasoning for the strong bullish activity we saw in the market last week despite the promising breakout from the 122.5 key price level.
Since we have seen an indication of 122.5 level acting as strong resistance, we would like to maintain our bias to the downside for this market. However, given the broader fundamental developments in the US stock indices, some more bullish activity this week will not be a total surprise.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.