E-mini S&P Futures (September)
Yesterday’s close: Settled at 2880.50, up 4.50
Fundamentals: U.S benchmarks are firm this morning but off the best levels of the session. Remember, the tape was upbeat early yesterday as well before a sharp fallout just ahead of the bell. Either way you slice it; a wave of better risk sentiment or recovery from exacerbated fears, U.S benchmarks finished yesterday on a strong note. Solid Trade Balance data from China and a stable Yuan fixing has allowed some of yesterday’s tailwind to carry over. Although overall Chinese Exports gained 3.3% YoY versus an expected drop of 2.0%, the data echoed the trade war as Exports to the U.S dropped by 6.5%. Even so, the Trade Balance with the U.S still expanded 11.1% YoY but did narrow MoM. On the bright side was strong demand from Europe with Exports +6.5% YoY. Another data component that stood out this morning is the quiet strength in Spain’s Industrial Production, today was the third strong month in a row after a dismal 2018 that carried into the first quarter. Crude Oil is also helping the broader risk-landscape bouncing back this morning after a sharp two-day decline that pinged the psychological $50 mark yesterday.
Weekly Jobless Claims are due at 7:30 am CT, Wholesale Inventories are released at 9:00 am CT and there is a 30-year Bond auction at noon. Yesterday’s 10-year Note auction saw less vibrant demand than anticipated and guess what, stocks extended gains afterwards. This could be a tone-setter for today’s 30s.
Technicals: In yesterday’s Midday Market Minute, we said to look for leadership out of the NQ and that is exactly what took place in the second half of the session. After that noon 10-year Note auction, the NQ pushed through major three-star resistance at 7540.50 and after settling above such it extended those gains just shy of our next key level at 7638.25-7642.25. Earlier too, the NQ held a massive level of support at 7385.25-7396.75 and we feel such constructiveness on the lows allowed for the tape to begin shifting from weakness to recovery-mode. The S&P now faces a strong major three-star resistance this morning at 2902.50-2907.75; a move out above here will encourage further buying. If price action can hold out above its previous swing high of 2889.25, the odds of the bullish wave become more likely. However, a move back through our 2871.50-2872.75 level that now aligns with the session low of 2870 will be considered a failure and the sellers will jump on this.
Resistance: 2902.50-2907.75***, 2914.50**, 2932.50-2944.25***
Support: 2880.50**, 2870-2872.75***, 2845.75-2849.50**, 2830-2832.50**, 2819.25-2823.25***, 2801.25-2802.50*, 2775.75**, 2757.25***, 2722-2732.25***
Resistance: 7638.25-7642.25**, 7686**, 7702.25-7735.75***
Support: 7540.50-7553.25***, 7487.75-7493.75**, 7437-7448**, 7385.25-7396.75***, 7356*, 7264.25**, 7199.50-7224.50***, 6936.25-6941.25****