Commodity Futures Market Analysis – November 19th, 2018

Commodity Futures Market Analysis – November 19th, 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)

Last week the S&P 500 Emini futures market displayed erratic and volatile movements as investors were reacting to the impending trade deal with China.

S&P Emini Commodity Futures Market Analysis November 19th 2018

Late last week, President Donald Trump said China was hopeful of a trade deal with the US. The news sent the S&P 500 Emini futures market recovering from some of the losses posted earlier in the week stemming from the sharp rebound off the critical 2800 price level and support and resistance area.

That sharp selloff pushed price lower to the 2700 level – also a proven support and resistance area – where buying on technical grounds was well supported by the fundamental stimulus from Trump’s announcement relating to the China trade deal.

However, that optimism may still seesaw going into this week, given how the White House officials last week promptly toned down Trump’s comments citing no concrete developments on that front with China yet.

Given the volatile trading environment for the market as of now, we suspect price movements will remain vulnerable to fundamental developments going into this week, making price prone to spiking around critical support and resistance levels as buyers and sellers respond to the uncertain Geo-political environment. However, the strong state of the US economy still makes us believers in a long-term bullish S&P 500 Emini futures market.

Light Crude Oil Futures (CL)

Light crude oil futures market continued to move sharply lower last week, marking the sixth consecutive week of falling price on the back of global oversupply concerns.

Crude Oil Commodity Futures Market Analysis November 19th 2018

The market did erase a small portion of the loss late last week on account of OPEC’s unanimous agreement to cut down output next month in the wake of the oversupplied world market. The good news came just in time for the price to rebound off the critical $55 former resistance level (that proved its worth as a solid support level) that was one of the two important price levels we had quoted as being on our watch list in our analysis for this market last week.

However, the news plus the technical catalyst in the form of the $55 price level were not enough to push the market out of a month and a half long selloff that appears to be going strong for now. We do however note the rapid acceleration of price towards the $55 level, which we perceive as a bullish indication. We are watching the $55 level extremely cautiously for signs of bullish activity early in the week.

Gold Futures (GC)

The futures market for Gold closed more or less neutral as a sharp selloff early in the week was countered by a late-week rally to prolong the sideways consolidation theme dominating the current trading environment for gold.

Gold Commodity Futures Market Analysis November 19th 2018

Of prime importance last week was the noticeable bounce off the $1200 major round number and area of support and resistance that happened to fall in confluence with a rising support trend line (see chart above).

The bullish momentum from the impact has sent price closer to the $1240 level which, if tested early this week, could pose an interesting scenario and a potential bullish breakout environment. For now, the market seems obviously sideways and choppy which we suspect will remain the theme going into this week unless we see a confident break past the $1240 level or a sharp break under the $1200 mark.

Euro Currency Futures (6E)

Euro currency futures market was surprisingly sluggish last week despite the sharp move under the $1.134 support level in the week prior to last one.

Euro Futures Commodity Futures Market Analysis November 19th 2018

We had been hoping for the $1.134 price level to potentially flip into resistance and allow for more selling to come in the market – in line with the longer term downtrend – but buyers had other ideas last week.

A sharp rebound off $1.125 sent price distinctly higher unperturbed by the presence of the seemingly strong $1.134 price level. If this bullish momentum sustains itself going into the early past of this week, we could potentially see price creeping once again closer to the notorious $1.16 price level that for several months now acted as the pivot and a magnet for a majorly uncertain and consolidating market.

10 Year US Treasury Futures (TY)

The market for 10 year US treasury Futures struggled for one-sided momentum yet again last week although we noticed two distinct developments for the market.

Bonds 1 Commodity Futures Market Analysis November 19th 2018

The first major development was a win for the buyers as the market closed higher than it opened on every single day of the week, which in a largely indecisive market appeared refreshing.

The other development runs as a counter-climax to the first development, as we see the market inch closer to the all-important support and resistance level around the 119 round number. A strong close above the level last week, may potentially indicate to the continued dominance of buyers early this week, but within the larger uncertain context, we would like to see more evidence of the market successfully clearing the major hurdle at and around the 119 price level.

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

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