Commodity Futures Market Analysis – December 3rd, 2018

Commodity Futures Market Analysis – December 3rd, 2018


The following Commodity Futures Market Analysis is the opinion of Optimus Futures. Click on the charts below to enlarge it.

S&P 500 Index Futures (ES)

The S&P 500 Emini futures rebounded sharply as investors look forward to a mutual agreement between the US and China.

S&P Emini Commodity Futures Market Analysis December 3rd 2018

Last week National Economic Council Director Larry Kudlow specifically said the US officials were busy with a “lot of communication with the Chinese government at all levels”. The news sparked interest among investors ahead of the all-important talks between US president Donald Trump and his Chinese counterpart Xi Jinping. Optimism surrounding the potential trade agreement, sent the US equity sector and related indices sharply higher last week reducing much of the losses posted in the first half of November.

On the technical front, the rebound was timed just above the 2600 level, and while we did not get a precise touch of the level itself, strong buying did come in at a proven support zone (See chart above). Notably, the market currently sits very close to the all-important 2800 level. While the broader market sentiment will perhaps be primarily steered by the developments on the US-China trade deal, the 2800 technical level is an important one to watch as well. A break above the level early this week could set the tone for more bullish activity going into the end of the year.

Light Crude Oil Futures (CL)

As expected, the market for light crude oil futures did stall at the critical $50 mark, as bears take a step back to evaluate their achievement thus far.

Crude Oil Commodity Futures Market Analysis December 3rd 2018

Much of the mid-to-longer term prospects for the market still hinge on OPEC’s upcoming meeting on December 6 relating to global output decisions, but the rapid drop in price down to the critical $50 level has had the sellers thinking once again.

On the chart this was printed as a stall precisely at the $50 level, and an open this week well above the $50 price level suggests we could be in for a potential pullback into the steep move down that the market witnessed for much of November.

Notably though, while we notice the market stalling at the $50 level, we do not yet see any major bullish signs or price action that would suggest a complete reversal or even a major retracement into the down trend just yet. We believe that as of now, the bears still appear to be the dominant of the two parties.

Gold Futures (GC)

Futures market for Gold continued to wind tighter into a period of consolidation last week as the 1215 level provided decent support to the market all week, while lazy attempts from the bulls left the market still struggling for much needed impetus.

Gold Commodity Futures Market Analysis December 3rd 2018

Looking at the market holistically, we now see current market action as a possible attempt to wind price tighter within a wedge pattern formation centered around the 1215 price level and horizontal area is support and resistance. And a tightening phase of consolidation often implies an impending momentum breakout that we will be anticipating going into this week.

Euro Currency Futures (6E)

Euro currency futures market behaved rather similar to the Gold futures market last week as we see relatable sideways trading activity, a clear lack of direction and the market potentially winding up into a wedge pattern formation.

Euro Futures Commodity Futures Market Analysis December 3rd 2018

We note that the market seems to have certainly moved down from the notorious $1.16 level that had previously been acting as a magnet for price during a past consolidation phase. But unlike our expectations of more dominating activity from the sellers, we see the market still struggling to clear the support at $1.133 price level.

That struggle has lead price to tighten up around the $1.133 level which again implies we could be building towards a breakout scenario which we will keep an eye out for going into this week.

10 Year US Treasury Futures (TY)

The market for 10 year US treasury Futures remained on a noticeable bull run last week, as the market pushed higher above the critical $119 level of support and resistance.

Bonds 1 Commodity Futures Market Analysis December 3rd 2018

We noted last week, that the past the $119 level we see little resistance for price up until the $120 major round number and area of support and resistance. Despite a strong week of buying, we did not see the market actually testing the $120 level, and is something we will be looking for going into this week.

We note however, that the market has opened with a gap down and closer to the $119 level, which could continue to provide support for the market and allow for a lower price level for more buyers to come into the market early in the week.

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

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