E-mini S&P (March)
Yesterday’s close: New all-time settle of 2667.75
Fundamentals: The market pulled back nearly 10 ticks last night on tax reform nerves after Alabama Senator Ray Moore failed to win reelection, losing to Democrat Doug Jones. This cuts an already thin edge by Republicans in the Senate to 51-49 and if not tax reform it will surely shake things up by next year’s congressional elections. The pullback was short lived, and we are back to unchanged this morning as the Fed drift remains intact and expectations of a ‘not so hot, not so cold’ policy statement is the perfect recipe for this market during a seasonally bullish time of year. Despite the Senate race, Treasury yields are actually higher this morning. Secretary of State Rex Tillerson did issue a statement to North Korea, asking to just meet and backing away from the hardline requirements to sit down; such as, ya know, ending that nuclear program of theirs. We imagine the market finds this favorable for the time being. A big day gets underway and CPI is due at 7:30 am CT and comes on the heels of a strong PPI read yesterday and gives the Fed ammo to use this afternoon. President Trump speaks this afternoon ahead of the FOMC Meeting that concludes at 1:00 pm CT and of course they are expected to hike rates. Their economic projections and dot plot will be key in that pendulum of perception we always talk about. Janet Yellen will conclude her last meeting with the press conference at 1:30 pm CT.
Technicals: Price action traded to a new all-time high of 2673 yesterday but settled right at major three-star resistance; we want to see a close out above here to provide further fuel to power this move to 2715. The Russell has lagged the most since the Sunday night December 3rd open. Today will be crucial and we want to see a close out above the highs this week at 1532 in order to signal that the whole market is on board to go higher. The NQ is building a potentially nice descending wedge pattern, a bullish pattern, and a minimally better close above 6427.75 should spark a move to take out the all-time highs at 6446.50. Back to the S&P, minor support does come in at the overnight low, 2659.25, and ultimately traders do not want to see a move back to here this morning. Doing so could turn the tape heavy into this afternoon. This level must signal a rejection to go lower overnight and the bulls are in the driver's seat right now.
Resistance – 2666-2667.75***, 2673*, 2681.50**, 2688**, 2694.50**, 2715.25***
Support – 2659.25*, 2650.25-2654**, 2643.75-2644.75**, 2640.25*, 2630.50-2632.50**, 2622.50**, 2506.25**, 2596-2598****