Equities show signs of stabilizing

Crude (CME:CLU14)

I am short from yesterday from $98.50 covering on the first dip on or under $98.00.

Then reloading my sells again: Crude oil has continued a slight grind higher off of major four star support that was reached early in Friday’s session. The market reached a high of 98.67, failing at our first two star resistance last night following poor data out of China; the world’s number one consumer. API will release weekly inventory data today and expects to see another drawdown of more than 1.5 million barrels, followed by EIA Wednesday; these will play a pivotal role in helping Crude trade off of the lowest level seen in nearly two months. The market must close above the 98.60 level in order to put pressure on shorts to cover.

However, a close back below 97.75-97.90 will signal a failure and a likely retest to major four star support. A stronger Dollar has continued to put pressure on Crude Oil as well as a lack of new geopolitical news. ISM Non-Manufacturing will come out today and in line data may be the best situation to help stabilize a market. Better than expected US economic indicators will continue to press the Dollar higher while giving a slight good news is bad news reaction to Oil.

 

Resistance - 98.60**, 100.00**, 100.29-100.34**, 100.84***, 101.34*, 102.33*, 102.74-102.99**

Support –97.75-97.90*, 96.82-97.05****, 96.30-96.45*, 95.80**

 

E-mini S&P 500 (CME:ESU14)
 
Covering yesterday's short this morning at 1923.00, Looking to resell 1933/38.

Equities showed signs of stabilizing into the close yesterday as the S&P finished just above our two star resistance at 1929.75-1931. This morning though, the tape is weak following a poor Services PMI read out of China which was followed by mixed to poor reads out of Europe. This is a pivotal time as the market has bounced reaching first major resistance and is showing signs of failure into this morning.

Today’s close is tremendous and a move back below the major level 1917-1919 will confirm that yesterday’s price action was merely a dead cat bounce. Bulls should look to use that level and the first test as a buying opportunity. ISM Non-Manufacturing will be the major focus today and the reaction to this release will be able to confirm or deny that we have entered into a good news is bad news type of market. Only a close back above 1936.50-1938 this week will help negate this bearish activity while putting the bulls back into slight control.

 

Resistance - 1929.75-1931**, 1936.50-1938***, 1942-1944**, 1947*, 1952.50-1954***

Support – 1917-1919**, 1910.50**, 1900.50***, 1882-1884.50***

 
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.

Rich is featured expert/trader and contributor on CNBC's "Futures Now" Show, and has been quoted in multiple of top-tier publications, including: The Wall Street Journal, Associated Press, Bloomberg News and Reuters.

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