U.S. equity futures are having trouble showing a strong rebound from the plunge beneath 1400 (DEC 12 E-mini S&P futures) overnight. S&P 500 futures are in the red this morning at -.46% as of this writing. The overall feel of earnings season is of underwhelming numbers causing concern for investors. Coupled with new Greek rumors, this market is dominated by concern at these levels. We are starting to see potential of U.S. equity futures continuing to go sideways or even down farther until we get a true resolution on the relationship between Greece and the euro. One scenario is that Greece leaves the euro and then the U.S. stock futures will then potentially have a relief resolution rally.
Sometimes the market does the exact opposite of what you think it will do. This could be the case if Greece leaves the euro. One might think that Greece leaving the euro would cause chaos in the markets and that the stock market will go down drastically, but actually the opposite could happen because of relief and more clarity.
Regarding energy markets, crude oil continues to have trouble finding buyers and is slightly in the red today. This market continues to trade well beneath our key pivot level of $92. As we have been noting, we see the next downside target for crude oil futures at $82.
Natural gas futures are actually leading the way down in the whole commodities complex this morning, trading at -2.15% as of this writing. After an incredible rally above the key $3 level all the way up to almost $4, we have seen a recent correction. As you can see on our included chart, DEC 12 natural gas futures hit its first major supportive trendline this morning in the low $3.70s. The next two key support levels in our opinion for this market are $3.65 and then $3.55. We see $3.55 as a major support level, and anticipate buyers coming in strong if this market gets to that level.
Click to enlarge.