E-mini S&P Futures (December)
Last week’s close: Settled at 2963.75, down 16.75 on Friday and down 25.75 on the week
Fundamentals: U.S benchmarks are working higher from Friday’s trade scare. It was reported the White House is/was considering both delisting Chinese companies from U.S stock exchanges and imposing restrictions on U.S investments in China. Although the administration has denied these rumors, halting either tactic from gaining traction over the weekend, one must understand these narratives came from somewhere. If either comes to fruition it would quickly escalate tensions between the two sides and further hamper global growth. For now, high-level Chinese delegates are expected to visit Washington next week after China celebrates the 70th anniversary of the Communist Party’s rule which begins Tuesday and essentially shuts down the country. Chinese Manufacturing PMIs were released last night and despite the state-run read contracting for the fifth month in a row, it was better than expected at 49.8 versus 49.5. The Caixin HSBC datapoint is grabbing headlines though coming in at 51.4, the strongest since March 2018. The better data has helped lift sentiment in the face of heightened protests in Hong Kong ahead of the holiday, the Hang Seng gained 0.53%.
The economic calendar is busy this week but quiet in the U.S today. Data from Europe underwhelmed at best with German Retail Sales, Spanish GDP and Italian CPI all missing. German CPI is due at 7:00 am CT and tomorrow we get the Eurozone read. Chicago PMI is out at 8:45 am CT and followed by Dallas Fed Manufacturing at 10:30. Tomorrow, we look to a pivotal ISM Manufacturing read. The odds for a cut in October continue to waffle around a coin flip.
Technicals: Friday’s weakness finally achieved our only major three-star support and intermediate-term downside target at 2938.50-2943.75 with a low of 2946.25. The NQ also trekked to a fresh low on the week but stopped just short of major three-star support at 7580.75-7612.50 with a low of 7641. The move lower has created strong overhead resistance for each, in the S&P this is major three-star resistance at a wide range that aligns multiple indicators including a retracement and our momentum indicator at 2975-2982.50; a move and close above here will neutralize Friday’s activity and open the door to additional buying. For the NQ this aligns similar indicators and comes in at 7768-7779; it will be treated in a similar manner. Major three-star support comes in at Friday’s settlement prices and a move below here would quickly accelerate the selling and open the door to a retest of Friday’s low.
Resistance: 2975-2982.50***, 2987*, 2993-2995**, 3006-3013.75***, 3025.75-3029.50***, 3044-3057.75***
Support: 2963.75***, 2953.75*, 2938.50-2943.75***
Resistance: 7768-7779***, 7807**, 7830.50-7855**, 7904.75-7918***
Support: 7701.25***, 7668.25-7685*, 7641**, 7580.75-7612.50***, 7520-7520.50**