(CME:ESZ13) - The market quietly waits: Equities have started to show signs of bottoming as many investors find value after this correction following the highs put in after the Fed's decision to avoid tapering. The correction was obviously caused by the budget debate and led to a government shutdown at midnight last night. Past results after a government shutdown show just the opposite of what many fear. Yes, although, many jobs have been suspended or even cut because of this shutdown one thing has not changed in the equity market; the Fed's back stop and individual stock performance as we have had improving economic data and improving earnings (heading into earning season now). Growth will take a hit and globally, this is not good, but until there is proof through economic data misses, this correction should prove to be a buying opportunity once it has consolidated. The S&P has corrected nearly 3.5% since after the Fed failed to cut its bond purchasing program and investors are finding value at these levels. The high this session is 1684.25 as we find resistance against previous support and at the summer’s gap. Bears can look to sell again here but a close above 1687 will likely ignite a consolidation higher. Bears want to see a continued close below yesterday's highs of 1681. Bulls can continue to use the major 1674 level as support and as just mentioned use a close above 1687 as confirmation of a consolidation higher. Still as we maintain that only a close above 1698.50 will ignite a bull leg higher.
Resistance -1684**, 1687.50**, 1698.50**, 1704, 1710.50**
Support - 1674***, 1666*, 1660.75-1662.50***, 1656.75***
(NYMEX:CLX13) - Bears take pause: Crude oil once again saw short covering ahead of the floor close of yesterday’s session. At levels above $100 the growth factor may take its toll on crude oil more than anything as not only growth in the U.S. will take a hit because of a government shutdown, but most importantly global growth. The low this session was $101.84 as the market has continued to hold the three star support level and a higher low than yesterday. With equities correcting off of Sunday night lows and a Dollar Index that is trading lower and hugging 80, crude oil is finding support. Yesterday's marked close was at $102.33 right in the resistance pocket. A close above here today but further more above $102.65 and $103.07 will be needed to spark a recovery to $103.74-.93 and we want to repeat that keep an eye on equities and a close above 1687 should help pull Crude higher. Only a close on new session lows and below the major $101.50-.64 pocket will signal a failure and likely test to 99.78.
Resistance -102.20-102.37**, 102.65*, 103.07*, 103.74-103.93***, 104.54-104.40**
Support - 101.50-.64***, 101.05*, 100.58**, 99.78***