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)
Several stocks in the S&P 500 market last week closed out their best January in three decades as the broader market continued to be spurred by a strong US economy and developing relations with China.
The S&P 500 E-Mini futures market remained sharply bullish, especially near the end of the week where yet another solid jobs report lent even more confidence for buyers, while strong earnings from some major technology companies such as Facebook added a further catalyst to the rally.
Last month, the Bureau of Labor Statistics said 304,000 jobs were added to the US economy, despite the 35 day US government shutdown. That means the country has been posting an increase in jobs now for the 100th consecutive month.
On the technical front, we noticed the market finding strong support at the critical 2600 price level and now continues to push higher above, despite the existence of potential resistance hurdles created by the recent consolidation around current price levels. However, given the strong underlying fundamentals, we continue to remain buyers for this market going into this week.
Light Crude Oil Futures (CL)
The market for crude oil posted positive developments from the buyers’ perspective last week, as the $50 major psychological price point and support and resistance level continued to provide major support, allowing a launch pad to encourage fresh buying.
We notice that price seemingly has not cleared the support and resistance level around the vicinity of current price action (see chart above), but seeing how the $50 level that appears to be gathering the most attention from traders, is well below current price levels, we believe the market may have more room to climb higher going into this week.
We do see little resistance in the way of buyers until the $58 level and prices beyond which marks a major swing low in the past. As for now, we see no major technical indications of bullish momentum exhaustion for this market.
Gold Futures (GC)
The market for Gold remained strong above the $1300 major round number last week, although we are seeing potential early warnings of an inevitable pullback towards the $1300 level which we believe could be a possibility going into this week.
Last week’s strong and high profile burst past the $1300 level did leave much to be desired from the level’s ability to hold as support. We do believe a test of the level may be on the agenda for traders in the market this week, especially given how the market appeared to lose some bullish momentum on the final trading day of last week, calling for a weaker close.
Euro Currency Futures (6E)
Futures market for Euro remained rather sluggish and indecisive last week as the market continues to remain volatile and receptive to major levels like the $1.14, $1.15 and the $1.16 levels.
We do however see market potentially tightening inside of yet another wedge pattern formation majorly centered around the $1.15 round number (see chart above). The sharply descending trend-line and the recently created support trend line could eventually create further constriction within trading ranges allowing for the market to move closer towards a much-anticipated breakout and more decisive trading activity.
However, until we see price constrained within the wedge pattern, we suspect the same dull and indecisive trading activity to linger on for a little while longer.
10 Year US Treasury Futures (TY)
The market for 10 year US treasury futures remained sandwiched between two important round number price levels and support and resistance levels last week as support from the $121 level and resistance at and around the $123 levels restricted the trading range for the week.
We also notice a mid-range support and resistance level around the $122 level which is round about where the market closed last week and also opened for a fresh start this week. We do not expect the market to move much vertically until we see the break of either $123 level or $121 level, but we also suspect $122 level to potentially act as pivot while the market remains constrained between the two support and resistance levels mentioned.
Overall the market has been in a long term downtrend and the sharp rejection earlier off the $123 level does point strongly towards the potential likelihood of the market resuming that downtrend at some point in the near future. So far we have no major indications to suggest any incoming bearish dominance in the market.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.