E-mini S&P Futures (September)
Last week’s close: Settled at 2950.50, down 9.50 on Friday and up 55.75 on the week
Fundamentals: Last week, the Fed’s dovishness fueled the S&P to a fresh record high. Price action is lingering just below with U.S and China trade talks and Middle East tensions front and center. China confirmed this morning that lower-level delegates are preparing for a meeting between President Trump and President Xi on the sidelines of the G-20 Summit June 27-29. The one-two combo of central bank dovishness and high hopes for this round of trade talks have already boosted equity markets; we must now see positive developments. Putting a damper on this atmosphere though is poor economic data which has paved the way for that central bank dovishness and escalating tensions within Iran. After calling off a military attack Friday, Washington is now threatening additional sanctions on the Middle East nation and Crude Oil is trading at a one-month high.
Chicago Fed National Activity is due this morning at 7:30 am CT and Dallas Fed Manufacturing Business Index is due at 9:30 am CT. Tomorrow’s calendar is a bit busier with housing data and Consumer Confidence.
Technicals: We are certainly not arguing with a path of least resistance higher. As you know, we have been Bullish in Bias, tracked and called the bull-flag breakout last week. At this level though, technically and fundamentally, we are more cautious. Price action has struggled to close out above the previous front-month high of 2961.25 and although intraday spikes to new records have been strong in nature they were all rejected, for now. Additionally, our major three-star resistance level in the NQ which sits about 1% below the record high has kept a lid on rallies. As the week gets underway, pullbacks that hold our major three-star support levels are most important, this will lay constructive groundwork that fuels an extension to last week’s gains. Still, the 2949.50-2953.50 pivot is again in play; just as we said here Friday, “Through the open and first hour of trade, if price action is stable above here, it could signal that the bulls will attempt one more push to record highs.” Overall, we are Neutral in Bias as we do not think this is time to press the gas.
Resistance: 2961.25***, 2967.75**, 3000**, 3023.25-3035***, 3057.75**
Support: 2935.75-2936.50***, 2929**, 2915.25-2918***
Resistance: 7803.50-7834.25***, 7879.50***, 7910.75-7930****
Support: 7702-7721.75***, 7630-7633.75***, 7544.25-7561.25***