The E-mini S&P 500 futures market touched an important support level this morning at 1418, then bulls quickly found interest, bringing the market up 8 points from Friday’s close, as of this writing. 1416-1418 was the high area in August 2012, and this level served as solid support this morning. The market got a bit oversold, especially when finding out that retail sales numbers came out above expectations, and Citigroup beat estimates on their earnings.
One interesting note is that if oil prices keep dropping (down more than $1 this morning as of this writing), this might result in increased stock prices via increased consumer spending and investing. As we noted previously, our key pivot area for oil futures is $93-$94, and oil seems to be holding below this level. The next major downside levels in oil in our analysis are $88, and then $82.
We focus deeper on the S&P 500 today. As we have discussed, the market bounced off a very key support level this morning and is now positive today. Our key pivot level for the S&P 500 futures market is 1435. The market has held beneath this level for a few trading sessions. However, we anticipate a rally back above this level shortly, as US economic data has been surprising to the upside. If this market tests the key support area of 1416-1420, we expect buyers to swiftly come in and bring the market higher once again.
Click to enlarge.