Stock indexes run into resistance ahead of FOMC

(CME:ESU13) - The market got ahead of itself: Global equities were unable to hold a five-year high as the S&P was unable to retest and take out Sunday night’s high of 1710.50. Our resistance level of 1711, which came back into play in a hurry yesterday, has stood strong and we have seen profit taking on what is being coined the Summers trade. The S&P is finding itself on the low of the session against the major 1695.50 support level, reaching 1694.75. This will be a pivotal level to watch on the close and below here should encourage further profit taking ahead of the conclusion of the FOMC meeting tomorrow. There is a lineup of data today headlined and CPI at 8:30 EST. If we see further profit taking, light support comes in at 1687.50-90.50, which should present a good buying opportunity upon the first test. Major support comes in at 1681 and only a close below there will signal a failure. Resistance remains at 1703-05 and we will look to sell a first test to this level. However, a close above here will be very bullish.

Resistance - 1703-05***, 1711***, 1717.50**, 1726*, 1757***

Support -1695.50***, 1687.50-90.50*, 1681***, 1674.50**, 1666***

(NYMEX:CLV13) - Crude needs a catalyst to continue lower, Libyan production coming back on line should be the mover: Crude oil has shown signs of stabilizing overnight and is currently trading on session highs at roughly $106.25. The market saw a very similar trade to that of gold. When news broke that there was a shooter on the loose in Washington DC's Navy Yard, anyone's first instinct is that this is a terrorist attack. Hence, a trader’s first instinct would be to buy crude oil. The market was nearly $2 off of Sunday night's $108 high before this news broke and helped rally the market more than $1 to a high of $107.38; putting crude back above the major $106.91 level. However, once the shooting was contained and the shooters were identified, crude broke back down finding new lows against $106. Heading into today all eyes remain on what is major resistance of $106.91 and only a close above here can help jumpstart this market. Until then, $106.91 will be a major resistance. Our one star support pocket from $105.56-.88 has held very well but the next major downside target is $104.89-$105. Ahead of the Fed and EIA data tomorrow and without any major headlines (do not forget Syria and the UN report), look for the market to remain in check and bulls can look to buy a new low against that major support level.

Resistance -106.91***, 107.85-95*, 108.23**, 108.60**, 109.17***

Support - 105.56-.88*, 104.89-105***, 102.25****

About the Author
Rich Ilczyszyn

Rich Ilczyszyn is Founder and Chief Market Strategist of iiTRADER.com. Rich excels at creating dynamic trading strategies for clients that establish solid positions, while remaining flexible enough to capitalize on market opportunities when they arise. By identifying market trends, breakouts, and failures in a timely fashion, Rich presents clients with the opportunity to realize their objectives while effectively managing their risk.

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