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 market could not post a new all-time high last week amidst increasing concerns over trade conflicts with China, keeping investor sentiment rather constrained for the week. Overall, the market seems well-poised to continue climbing closer towards the 3000 big round number mark.
Notably though, the end of last week marked the broader S&P 500 index’s strongest quarterly gains since 2013, mainly on the back of solid corporate earnings reports and a generally strong economy. The index gained 7.2% in the quarter ended September 28th 2018, just behind the gains posted in the fourth quarter of 2013.
On the technical front, the S&P Emini futures market seemed to have pulled back to the former resistance level at 2900, and late market activity last week suggests this level could potentially hold and allow for more buying coming in this week. We are consistently eyeing for the market to hit the 3000 major round number in the coming few weeks, as trading activity so far does make us believe the uptrend continues to be strong. We are seeing only non-threatening minor pullbacks into a generally strong uptrend that is consistently making higher highs and lows to keep the momentum intact.
Light Crude Oil Futures (CL)
Light crude oil futures market was an interesting one to follow last week, seeing how buyers were actually able to push prices further up above the $70 price level and the periods of resistance in the vicinity, closer towards the long term support and resistance levels at and above the $74 mark.
Notably, the latest push back towards the $74 price level appears to be different than the last time, in that we are not seeing any sharp volatile price movements towards the level that may have hinted at the possibility of a reversal off the resistance level. Instead, the consolidation just underneath the $74 price level and the push past the $70 round number could all weigh in favor of an extended move towards the upside and represent a genuine attempt from the market to test – and possibly break – the $74 resistance level for good.
Of course, the looming supply concerns also helped catalyze strong bullish activity last week. South Korea’s crude oil imports from Iran fell noticeably in the month of August, just a month ahead of the critical deadline for a fresh round of sanctions on Tehran from the US.
Gold Futures (GC)
Futures market for Gold behaved relatively as per our expectations last week, dropping below the well-defined wedge pattern formation, in line with the longer term down trend. However, we did not see sustained bearish activity as a late pullback on Friday brought the market once again closer to the $1200 major round number that the market has been oscillating around for the past several weeks.
While the market shied away from testing the swing low at $1170 last week, we still see a potential retest of this level this week should the $1200 level continue to act as resistance and allow for sellers to once again dominate the market.
We still favor a move to the downside in line with the longer term downtrend, but also acknowledge the broader volatility and erratic market rhythm, and so an extended consolidation phase going forward cannot be ruled out just yet.
Euro Currency Futures (6E)
Euro currency futures market eroded much of our excitement and interest last week that had stemmed from the market’s attempt to try and push further away from the $1.16 major support and resistance level in the week prior to last one. In fact, the prior week we saw the market actually rebound off the resistance level at $1.18 and head once again towards the $1.16 level – potentially signaling an extended consolidation phase for the market.
The strong bearish activity – if it continues going into this week – may potentially take us back for another retest of the $1.16 major support and resistance level, neutralizing the impact of the refreshing buying that came into the market in the week prior to last one.
We revert back to our earlier stance for this market and now will wait for price to once again show signs of escaping the vicinity of the $1.16 price level.
10 Year US Treasury Futures (TY)
The market for 10 year US treasury futures did build up on the bearish momentum following in from the week prior to last one, however the market did react and bounce of the former swing low at 118.2 to cap sellers’ efforts and push price towards a retest of the former support level at the 119 level.
Notably, the last two trading sessions in the prior week showed signs of the market holding up at the 119 level which keeps us hopeful of a potentially fresh move down earlier this week from the sellers if they try to build on the momentum from the prior week.
We do however acknowledge the impact of the swing low at 118.2 price level and continue to see this as a potentially major source of support for the market going into this week. Our interest in seeing the continuation of the down trend should really ignite as and when the market actually breaks under the 118.2 price level and swing low.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.