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 last week responded to broader market concerns and knee jerk reactions stemming from the recently reshuffled communications sector within the S&P 500 index as well as news relating to the spike in long term borrowing costs spurred by a batch of upbeat US economic data.
The last two daily trading sessions the prior week accounted for most of the bearish activity as the market pulled back down to rest the critical 2900 price level and the nearby long term horizontal support and resistance level.
Notably though, we do not see the recent pullback as a threatening one at all for the current up trend, despite the long range on the last two daily bearish candlesticks the prior week. We still see the market as highly probable to find support around the 2900 level and continue to eye the 3000 big round number mark as a near-term target for buyers.
Light Crude Oil Futures (CL)
Light crude oil futures market see-sawed for much of last week, as a confident push past the critical $74 price level was met with equal resistance from the sellers that forced a neutral close for the week.
Reports of dwindling crude oil inventories in Iran helped stoke much of the bullish momentum in the first part of the week as price pushed past not only the all-important $74 price level but also the $75 price level.
Unsurprisingly however, efforts from the bulls were met with increased resistance from the sellers in the latter half of the week, given the importance of the $74-$75 long term support and resistance levels. The sharp move through and back towards the $74 price level appears to us as a potential fake breakout scenario and we see continued weakness for this market this week if sellers are able to push prices under $74 early in the week. Their attempts may at least partially be supported by news linked with potential waivers from the US towards Iran sanctions.
Gold Futures (GC)
Futures market for Gold continued to be mostly sideways for the week. Much of the activity from sellers who took price further down south the week prior to last one in what appeared to be a breakout under a well-defined wedge pattern, reversed sharply this last week, resulting in a prolonged consolidation phase as opposed to a solid confident breakout under the 1200 price level.
The market’s sharp pullback again towards the 1200 round number suggests continued weakness in the market, and contrary to our expectations of a move in line with the longer term downtrend, it appears we might still be witnessing weak market action going into this week.
We suspect the market may potentially stay within a tight consolidation until we see a confident push past either the 1215 short term support and resistance level, or a break under the recently created swing low around 1170.
Euro Currency Futures (6E)
Euro currency futures market was dominated mostly by sellers as the reversal off the 1.186 resistance level took a fore front theme for the market this past week.
Notably, we again have the market closing well within the vicinity of the $1.16 major support and resistance level that has been acting as a magnet for price and has been serving as a pivot for the more recent consolidation phase.
Noting the support characteristics of the $1.16 price level, we suspect price may potentially continue to find support at the level possibly at some point opening the possibility of yet another retest of the resistance at the 1.186 price level.
Until then, we are back on the sidelines for this market as it tried to find its way past the middle of the consolidation space.
10 Year US Treasury Futures (TY)
The market for 10 year US treasury futures was among the most interesting markets to follow last week, as we saw market action unfold exactly in line with our expectations. The market unsurprisingly found formidable resistance after earlier breaking under the 119 important support and resistance level, allowing for sellers to dominate the week and take price further down south in line with the longer term downtrend.
It was encouraging to see that former support at the 118.2 level did not pose major challenges for the sellers last week, allowing for smooth periods of selling.
Should the 118.2 level continue to hold as resistance we find the market potentially well past the consolidation phase it was apparently tied into for several months lately. However, given the broader market weakness and fundamental catalysts, we would continue to look out for any volatile periods of trading activity or worse still a sharp move back up for at least a retest of the 118.2 level.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.