Commodity Futures Market Analysis – January 14th, 2019

Commodity Futures Market Analysis – January 14th, 2019


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&P500 Emini futures market continued to build on the bullish momentum last week, taking price further up towards some key former support levels that pack a strong potential to flip into resistance as we go into a fresh week of trading.

S&P Emini Commodity Futures Market Analysis January 14th 2019

Buoyed by the optimism surrounding a still-sturdy US economy and the job market as well as positive developments on the US-China trade talks, the market appears to have been busy over the last couple of weeks trying to erase the sharp sell-off posted towards the end of last year.

These efforts, however, may hit a brick wall this week as price inches ever so close to the all-important former support levels found at and around the 2600 mark. We did see a stall in buying going into Friday as the market came close to testing the 2600 level, and we suspect this level will be the most important one for traders going into this week.

Depending on whether price does or does not find resistance at the 2600 level, we may either see a sharp rebound back down or a continuation further up, in which case 2600 may flip back into support to allow for even more buying to enter the market.

Light Crude Oil Futures (CL)

As per our expectations, the market for crude oil did retest the all-important $50 price level but it was interesting to note that the test was met with little to no major resistance from the sellers at all, possibly proving that the entire push down below the $50 level may have potentially been a trap for the bears and a fake breakout.

Crude Oil Commodity Futures Market Analysis January 14th 2019

It should be interesting to observe when and if the market retests the $50 price level, will it find support off the important psychological level, because if it does, we could see the complete formation of a fake breakout scenario and an increased likelihood of even higher price levels for crude oil going into the following weeks.

We suspect the way for bulls has not been cleared as yet as price still has to battle past the recent consolidation phase that the market exhibited around current price levels.

Gold Futures (GC)

The market for Gold displayed a breather for the bulls last week which we are not entirely surprised to see given how the market had been rallying hard over the past couple of weeks, making the likelihood of a pullback/consolidation phase all that more inevitable.

Gold Commodity Futures Market Analysis January 14th 2019

However, a deeper observation of the technical aspects around current price action reveals another perhaps even more important reason for the current hold-up in buying activity in the market. We see price straddled at the very crucial $1300 round number that in the past has proven to be a very formidable source of support and resistance for the market – and is now possibly yielding its use as a level of resistance.

We believe the $1300 level will hold a key for the bulls and is a target that will need to be cleared before more bullish momentum is seen entering the market. On the flip-side, we will not be surprised to see a sharp rebound off the level going into the following weeks again given the importance of the $1300 price level.

Euro Currency Futures (6E)

Futures market for Euro unsurprisingly remained rather sluggish and non-reactive over the past week as well. A quick observation of technical aspects on the chart makes it an understandable scenario at the very least.

Euro Futures Commodity Futures Market Analysis January 14th 2019

We note the strength of the $1.16 level to act as both support and resistance for the market over the past several months and we are little surprised to see it provide resistance to the market yet again.

Despite the market appearing as if it broke out of a wedge pattern formation (see chart above) we had earlier warned that a break to the upside may well struggle for any kind of momentum as price battles against the resistance coming in at and around the $1.16 level. As of right now, we seem to be in the middle of that battle, with the price yet again attempting to venture past the $1.16 level last week and failing miserably.

We await more directional price action confirmation to re-ignite our interest in this market.

10 Year US Treasury Futures (TY)

The market for 10 year US Treasury Futures last week traded in interesting territories marked by some very significant and long term support and resistance levels for the market.

Bonds 1 Commodity Futures Market Analysis January 14th 2019

At the top we have the 121.20 former support turned resistance level that may have greatly been responsible for the sharp turnaround on the final trading day the week prior to last one – a move that helped pave the way and set the tone for bears going into last week as well. On the other hand, we seem to have a formidable former resistance level at 121.00 that may be showing signs of flipping into support – potentially driving the price into a sandwiched and narrow channel.

While we still wouldn’t classify this market as indecisive, we will be little surprised to see the market appear to trade sideways going into this week as traders weigh the likelihood of price breaking past the 122.2 level or the 121.00 resistance turned support level.

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

Notable Replies

  1. Great major futures technical updates.
    I have been receiving these in the email as well and I find them very useful.
    Good Job!
    Keep those Optimus Futures market commentaries coming.

    • P11
  2. Thank you! The key is to always analyze and never (X3) make decisions based on gut feeling, seems like, etc.
    Risk management above all.

    Matt Z
    Optimus Futures

  3. Risk management, right before the psychology and experience seems to be at the top of the most important components when it comes to trading success and long term survival.
    Always appreciate straight answers.
    “Risk Management Above All”, it sounds like the best motto for this business.

    • P11

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