The following Commodity Futures Market Analysis is the opinion of Optimus Futures. Click on the charts below to enlarge it.
E-mini S&P 500 Index
The S&P 500 Emini futures market climbed higher late last week as February’s job’s report eased concerns of inflation and remedial interest rate hikes. President Donald Trump’s initiative to meet with his North Korean counterpart meanwhile, eased knots on the geopolitical front causing a mini bull run for the market that is now pushing to clear resistance just underneath the 2800 price level.
Friday’s candlestick closed strong at the former swing point and resistance level and the rosy fundamental developments call for potentially more bullish activity in this week as the market inches closer to the 2880 level where we last saw a massive selloff triggered off by the same inflation and interest rate hike woes.
Light Crude Oil Futures
Light crude oil futures market continues to run sideways as the global tug of war between demand and supply continues to paint a mixed picture for the future of the energy commodity. Friday last week, however, belonged to the bulls as a new report from the International Energy Agency (IEA) sees continued increase in the demand for oil well past 2020, with US shale production accounting for the lion’s share of that demand as OPEC producers get slowly phased out of the market.
On the technical front, the market seems to be tightening up into a longer term wedge pattern, while more recent action suggests yet another micro version of a tight channel further constricting price movement, potentially leading to the possibility of a breakout.
The technical developments make the market prone to a major volatile move possibly triggered by fundamental developments in the near future.
Gold commodity futures last week showed more signs of broader market sentiment weakness caused by the market being sandwiched between two significant support and resistance levels: The ceiling around the 1350 price level and the floor created by the rather thick zone around the 1300 round number.
After failing to test the 1300 round number earlier on, we have price possibly trying to push for a second attempt as sellers once again tried to regain control of the market during the latter half of last week. Still, price has yet to beat the support at 1315 price level before eventually testing the critical zone around the 1300 round number.
Part of the sell side activity later in the week stemmed from the increased investor interest in the American stock markets following positive jobs data and signs of decreased geopolitical tensions with North Korea.
Euro currency futures for the week traded in a rhythm similar to the gold market with price continuing to be caught up between the 1.25 resistance level and the major support at the 1.21 level that price is yet to test.
Technically, we seem to be in a downtrend as the market continues to print lower highs and lower lows, although the strength of the sellers here leaves much to be desired in terms of a dominant move to the downside.
Unless the market presses past either of the above mentioned major support and resistance levels, we suspect the market will continue to show signs of weakness and indecision.
10-Year US Treasury Futures
The 10 year US Bonds futures market last week yet again failed to press past the 120 major round number that continues to provide formidable support.
While we have been largely bearish on this market since the price dropped down under the 122.50 major support a few weeks ago, we do not like the lack of strength from the sellers. We now have price straddled at the 120 major round number rather precisely which is not a good sign for sellers.
As price continues to tighten up around the 120 round number we suspect the buyers might eventually come out stronger resulting in a push to the upside this week following the rock solid support that price seems to have found at current price levels.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.