(CME:ESZ13) - Look for the market to test highs early as U.K. and Germany bounce: Equities have held very well as the S&P retests 1750 this session. Yesterday's low tested below support at 1736 but as we distinguished in yesterday's report, we want to see a close below 1736 to signal more immediate downside. Traders will look to Jobless Claims and New Home Sales to further boost this market. We expect "good news to be good news" and "bad news to be bad news" as we look to Non-Farm Payroll and the Fed meeting next week to be the major indicators on Fed Policy. Our yearend target of 1757 has yet to be hit but with the market holding at this level we could potentially see a further rally testing the next resistance level of 1770. Still only a close back below 1734.50-1736 is needed to signal a further correction that would find the two major support levels at 1723-26 and 1717-18. Look for a failed new high today that consolidates back toward the lower side of today's range; 1742, where the bulls can look to step in with measured risk.
Resistance - 1753.25-54**, 1757****
Support -1742*, 1734.50-1736***, 1723-26**, 1717.75-1718.25***, 1710.75*
(NYMEX:CLZ13) - We are in sell the rally mode until further notice: Crude oil has been able to consolidate this session after a tremendous selloff this week that broke $100 and has not looked back. Yesterday's low came in at $96.16 and traders subsequently started to take profits after seeing the market more than $5 from the highs of the week. In a fast selloff, oil blew through the major $97.61-$97.78 level yesterday but has been able to consolidate back there this session with a high of $97.69. Look for a close back above here and a weaker dollar testing below 79.20 and furthermore 78.90 to signal a consolidation back toward $99.50-$99.65. A failure to close back above the $97.61-$97.78 level will likely bring a retest of the lows and close below $96.16 will bring into play our major downside target of $94.76.
Resistance -97.61-97.78***, 98.65*, 99.50-99.65***, 100*, 100.46**, 101-14-101.23***
Support - 96.66*, 96.16**, 94.76***, 90.00**, 88.00***