(CME:ESZ13) - Drifting Higher: Equities continue to press higher as the cash S&P reached a new record in yesterday's session. The futures remain against major resistance and previous highs at 1810-12.50; a close above here will likely cause a melt up factor reaching the next level, 1825, within the next session. The major focus remains the FOMC meeting next week, where an increasing number of analysts believe the Fed will begin scaling back its bond purchases. Furthermore, Washington has taken steps to finalize a budget deal in Washington (despite not reducing the debt). If such is finalized, it will be the first successful budget since 2011 and paves the way for the Fed to comfortably step in and reduce bond purchases in Bernanke's last meeting. A pull back and close below 1800 will be damaging to the bull camp. The 20-day moving average now comes in at 1793.75 and only a close below here will signal a further correction in the short term.
Resistance - 1810-12.50***, 1825***
Support - 1800-01**, 1792-93.75**, 1788.75**, 1784**, 1774.50-76***, 1766*, 1757***
(NYMEX:CLF14) - Shorts Covering Pushing Market Higher: Crude Oil traded through resistance and previous highs at the $98 level to reach a high of 98.74 early this morning. Crude has its first three star resistance coming in at 98.92 and then at 99.86-99.90 which provides tremendous headwind before $100. Data out of China marginally missed expectations, however coupled with beats in Europe and domestically through last week, global growth has continued to give a supportive trade to the energy sector. Furthermore, with the TransCanada pipeline is on track to for next month which will increase demand for WTI and has caused a tremendous narrowing in its spread against the Brent contract. Additionally, frigid temperatures across the US have continued to increase demand for energy products. Furthermore, the Dollar has been unable to see any type of bid despite strong data out of the US which has led to speculation that the Fed could trim bond purchases next week. A weaker Dollar has further supported energy prices. Only a close back below 97.71 can negate this early bullish action.
Resistance - 98.92***, 99.86-99.94***
Support - 97.72-97.90**, 97.42*, 96.68**, 96.30-96.15***, 95.57-.63**, 94.70-94.83***
