E-mini S&P Futures (September)
Last week’s close: Settled at 2924.75, down 2.00 on Friday and up 69.25 on the week
Fundamentals: On Friday, the S&P was rejected by our rare major four-star resistance for the fifth time. Slight weakness ensued ahead of the long Labor Day weekend and for good reason; outside of upbeat jawboning from both the U.S and China, there was absolutely no evidence the two sides had taken any real steps forward since announcing new tariffs on Friday, August 23rd. Not to mention, those new tariffs kicked-in on Sunday. Yesterday, it became apparent that the hopes of a September meeting between the two sides were dissipating and the S&P slipped back below the round 2900 mark, a psychological level it is hugging at the onset of U.S hours. China also said yesterday it logged a formal complaint to the World Trade Organization and the Chinese Yuan settled at the weakest level against the Dollar since February 2008; these occurrences are not signaling progress but instead budding headwinds.
Coming out of the long weekend, an event-driven week begins to unfold. ISM Manufacturing is due at 9:00 am CT and remember, we believe slowing data will weigh on market sentiment. Boston Fed President Rosengren, a dissenter to the July rate-cut, speaks at 4:00 pm CT. Weaker than expected Chinese Manufacturing Friday night did not help the open Sunday night, however, the HSBC private read Sunday night was better, and this lifted sentiment. Outside of budding trade headwinds between the U.S and China, the Brexit remains a complete mess. The British Pound is at the lowest level since May 1985 and new Prime Minister Johnson faces opposition to leave the EU with or without a deal on October 31st which could lead to a No-Confidence vote. Remember, this data-heavy and headline driven week concludes with Nonfarm Payroll Friday.
Technicals: Price action has gyrated back in forth during the thin holiday hours and our pivots today will be watched most closely in order to gain an edge on the near-term direction. For the S&P, this is 2914.25-2915.25 and the NQ its 7690.75-7695.50; below here, which they are this morning, the bears have a slight edge in the near-term. Upon waves of weakness, price action directly tested major three-star supports that align with the settlement and gap from August 29th at 2889-2894.50 and 7599.25-7611. These levels certainly provided buy opportunities yesterday. Although their strength is decreased upon a retest, those first tests were not during intraday hours so it must be taken with a grain of salt. However, decisive moves through here on strong volume is bearish. To the upside, a move above 2924.75-2926.50 in the S&P will neutralize the very recent waves of weakness from Friday’s high. Still, only a close above 2932-2944.25 is technically bullish.
Resistance: 2924.75-2926.50***, 2932-2944.25****, 2952-2958**, 2969.75***, 3000***
Support: 2889-2894.50***, 2875.25-2878.25**, 2862.25**, 2851.50-2855.50***
Resistance: 7731.75-7748*, 7789.50-7808***,7856.50**
Support: 7599.25-7611***, 7561.75*, 7504.50-7512.75***