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 made a sharp move up in lieu of the ongoing volatile trading conditions leading to some rather rapid and sudden price movements in either direction.
We had anticipated a sharp dip in price as we believed the strong upward momentum was unsustainable in a market long due for a major correction. After seeing a drop in prices for two straight weeks, this past week saw bulls regain some control and perhaps an indication that the uptrend might continue going forward.
We laid the foundations the week prior to last one as we noticed wicks being posted to the downside on otherwise wide-ranged bearish candlesticks. Price respecting those bar lows this past week indicated for some strong bearish activity following the sharp selloff – which similar to strong upward moves, are also usually hard to sustain, even for volatile markets like the S&P 500 Index at this time.
Given the volatile trading conditions, we will hold ourselves from issuing a short term directional bias for this market, but would be less surprised to see price continuing to head higher the following week.
Light Crude Oil
Light crude oil futures market for the week closed higher as a sharp bounce just above the 5800 level allowed buyers to regain momentum.
We had indicated two weeks ago that despite the sharp move down that we had witnessed, price was straddled at a key potential support zone around the 5800 price level that could cause an obstacle for the downward selling pressure.
Last week price bounced right off the significant support zone marked by the former short term wedge pattern and several bar lows from the consolidation box posted further in the past.
Going forward into the coming week, the bullish activity will likely continue as long as price stays above the 60 round number and the key support zone highlighted on the chart above.
Gold commodity futures bounced off strongly this prior week from the rather thick support and resistance zone stretching from 1310 to 1300.
Following the fake breakout from the obvious resistance zone at the 1360 price level a couple of weeks ago, price had been dropping sharply headed straight for the major support and resistance area around the 1300 round number.
Although we had anticipated price to inch closer to the 1300 round number before seeing any major bullish activity, price instead just bounced from the top range of the horizontal support and resistance zone around the 1310 price level.
Notably, we are back at the 1360 resistance level and testing the several swing highs in the vicinity yet again. We notice that the frequency of pullbacks to the 1360 resistance level seems to be increasing which may potentially be an early indicator of a break perhaps to the upside for this market. As the following week’s trading activity unfolds, we will be on the lookout for indications of an upward break past the 1360 resistance level.
Euro Currency Futures
Euro currency futures for the week were also bullish for the week, as price bounced off the 12240 price level to possibly resume the longer term up trend.
We had been anticipating price to trickle down further and perhaps attract stronger bullish order flow from the longer term horizontal support and resistance zone at the 12100 price level. Instead price bounced off a rather steep rising support trend line (see chart above). However, price is currently straddled at key resistance at the 12500 price level that we saw post a bearish pin bar a couple of weeks ago that eventually initiated the pullback into the uptrend in the first place.
Going forward we expect price to continue to be bullish for the following week, as the market gradually progresses to the longer term former support and resistance levels around 12800 which also serves as our more far sighted target for this market.
10-Year US Treasury Futures
The 10 year US Bonds futures market showed signs of recovering from the sharp bullish activity for the market that we witnessed the week prior to last one when a sharp selloff in the S&P 500 Index attracted a lot of traders seeking safe haven trading instruments at the time.
This past week, we witnessed a bearish candlestick successfully closing below the price level that had attracted bullish order flow the week prior to last one. We also saw an immediate retest of the level with the candlestick failing to close back above. Although too early to say in a definitive tone, we do suspect that the foundations could be getting laid for more bearish activity for the market in the coming weeks.
We earlier had price break down under a very important former support area, and retesting it as resistance initially. That level again held as resistance to cap the buyers’ efforts a week ago resulting in the sharp price movement to the upside.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.