E-mini S&P Futures (September)
Yesterday’s close: Settled at 2906, down 18.75
Fundamentals: Global benchmarks are surging this morning after Hong Kong’s leader Carrie Lam announced the withdrawal of the extradition bill that set off weeks of violent protests. Hong Kong’s Hang Seng finished up 3.9% and U.S indices followed suit; the S&P and NQ are up give-or-take 1%. Lawmakers in the U.K have also soothed angst, rejecting Prime Minister Johnson’s potential No-Deal Brexit path. The British pound has snapped back from the lowest level since 1985 but the only certainties surrounding Brexit are that there are none, but they can potentially get kicked down the road to January. Broadly speaking, risk-sentiment is much better today despite no fresh news on the U.S and China trade front. In fact, the rebound in commodity prices along with stocks would lead one to believe there has been progressing. Amidst deteriorating economic conditions, traders and investors alike are placing too much emphasis on both Hong Kong and Brexit when both are overshadowed by work still to be done. Look no further than the ISM Manufacturing data yesterday that contracted at the worst pace since February 2016.
With the odds of a 50-basis point cut in two weeks rising to nearly 10% this morning after St. Louis Fed President Bullard called for such action yesterday, today’s Fed speak is squarely in focus. NY Fed President Williams talks at 8:30 am CT, San Francisco Fed President Bowman and Bullard both speak at 11:30 am CT. Minneapolis Fed President Kashkari is due at noon and Chicago Fed President Evans is at 2:15. Remember, Williams, Bullard, and Evans are the voters in two weeks.
Technicals: Stocks are rebounding sharply from a dull start to the week. Ultimately, strong line in the sand support below held through yesterday and price action is now out above key levels that help the bulls regain a near-term edge. Still, the tape is not bullish until it can prove a breakout close above our ceiling of rare major four-star resistance at 2932-2944.25. For now, the S&P is handedly out above yesterday’s pivot at 2914.25-2915.25 which aligns today with our momentum indicator and through resistance aligning with Friday’s settlement at 2924.75-2926.50 while the NQ is battling above the pivot of 7690.75-7695.50. Although there was some weakness late in yesterday’s session both benchmarks finished firmly. However, if price action begins to slip, the NQ could find itself at a crucial level of technical support at 7599.25-7617.75 more quickly and a retest has a higher probability of violating such.
Resistance: 2932-2944.25****, 2952-2958**, 2969.75***, 3000***
Support: 2914.25-2915.25**, 2906**, 2889-2894.50***, 2875.25-2878.25**, 2862.25**, 2851.50-2855.50***
Resistance: 7731.75-7748*, 7789.50-7808***,7856.50**
Support: 7599.25-7617.75***, 7561.75*, 7504.50-7512.75***