E-mini S&P Futures (September)
Yesterday’s close: Settled at 2940, up 59.50
Fundamentals: U.S benchmarks roared higher yesterday and the constructive technical landscape provided a path of least resistance to tag unchanged on the week. Things shifted quickly on the reopen last night after news the U.S will delay a decision to allow U.S companies to do business with Huawei in response to China halting U.S agriculture purchases. After taking a two-day breather from the headlines, the trade war is again heating up. Given the depth of yesterday’s rally though, this is so far a minor pullback.
Europe is under pressure due to uncertainty budding in Italy and the DAX is down more than 1%. Deputy Prime Minister Salvini has called for immediate elections citing that the Lega and Five Star Movement coalition no longer have a majority in parliament. There is ongoing friction between the two parties and Salvini’s Lega is leading the polls.
This has been a quiet week for the U.S economic calendar and we look to PPI data this morning at 7:30 am CT. The more closely watched CPI is released Tuesday. However, data from across Europe has disappointed. U.K QoQ GDP contracted by 0.2% and other misses ranged from U.K Manufacturing, French Industrial Production, and Italian CPI.
Technicals: The S&P chewed through major three-star resistance at 2902.50-2907.75 just after the opening bell yesterday and as we stated here, a move out above there will encourage further buying. The next stop was our wide pocket of major three-star resistance that aligned multiple levels of resistance including last Friday’s settlement at 2932.50-2944.25; the high was 2940.75. After a lower reopen last night, this level still stands as strong resistance today. The NQ set the tone from Wednesday and into Thursday by holding out above our 7540.50 level which placed it in the bullish driver’s seat until the S&P faced 2907.75. Its tracks were stopped at major three-star resistance at 7702.25-7735.75 to also open up lower last night. The first key support is holding thus far at 7642.25-7650.75 but a move below here and below 2909.50-2914.50 will encourage additional selling. This wave higher remains intact until a close below 2870.50-2877.75 in the S&P and 7542.25-7553.25 in the NQ. We remain Neutral in Bias and as we have said all week, this can be traded from both sides but follow the momentum for the larger swings; it's ok to be wrong, just a matter of how long you stay wrong.
Resistance: 2932.50-2944.25***, 2952-2955**, 2969.50***
Support: 2909.50-2914.50**, 2901.75**, 2891.50**, 2870.50-2877.75***, 2858.25**, 2819.25-2823.25***
Resistance: 7702.25-7735.75***, 7806-7815.25**, 7856.50**
Support: 7642.25-7650.75**, 7542.25-7553.25***, 7481.50-7493.75**, 7420.75*, 7385.25-7396.75***