E-mini S&P (December)
Yesterday’s close: Settled at 3117.75, up 6.75
Fundamentals: Major U.S benchmarks are pointing higher ahead of Nonfarm Payroll with news on the trade front driving price action. China said they will waive a 25% tariff on pork and soybeans, hoping to achieve an interim “Phase One” trade deal to avert fresh tariffs on December 15th. Ultimately, whether those new tariffs get implemented is what’s driving risk-sentiment. This morning, Nonfarm Payroll is front and center though. The U.S consumer has done the heavy lifting all year and continued job growth will be a bullish catalyst for this market. Expectations are for 186,000 jobs added in November with steady wage growth at 0.3%. The private ADP Payroll survey on Wednesday printed only 67,000 jobs and did ignite some concerns. At 9:00 am CT, we get a read on December Michigan Consumer data, don’t ignore this pre-holiday-season number.
Technicals: The S&P achieved a close above major three-star resistance yesterday, but the NQ stayed contained below 8316-8332.50. The overnight boost has now lifted the NQ out above this resistance band, paving a path higher as long as both indices hold above first key supports seen below and furthermore our pivot levels. Still, there is strong overhead resistance in the S&P that cannot go unnoticed at 3132.50-3135. Where a failure to close above here will give the bears some hope, doing such is extremely bullish.
Crude Oil (January)
Yesterday’s close: Settled at 58.43, unchanged
Fundamentals: Yesterday was a bit of a disappointment for the bull camp as price action failed to achieve $60 and reversed all early gains. Although an additional 500,000 bpd cut by OPEC+ seemed to be a foregone conclusion, the cartel began exuding some uncertainties ahead of the close. The Saudi Energy Minister Prince Abdulaziz bin Salman said late to expect “beautiful news” despite reports that Iran’s representatives left the meeting early. The real issue with the headline cut is that Saudi Arabia is already producing below its ceiling and there are some waivers for Russia. While we must wait to see the final announcement, it is also important to understand the cartel expects to see a 70,000 bpd surplus next year and this is what they are trying to alleviate. Although Crude Oil has rallied as much as 6% this week, energy stocks have missed the bus; Bill Baruch joined CNBC’s Fast Money yesterday to tell you how he’s playing it.
Technicals: Price action does favor the bull camp while out above the 200-day moving average. However, it failed to again close out above 58.64-58.93 and this has kept near-term sentiment in check. Although we are slightly Bullish because of recent momentum, we do want to be sellers at the 60.45 mark and take a short position at that level. Our momentum indicator comes in at 58.43 this morning and continued price action below here will favor the bears in the very near-term. Only a close back below 57.30-57.55 is a failure and bearish.
Resistance: 58.64-58.93***, 60.45***
Support: 57.86*, 57.30-57.55***, 56.10-56.44***, 54.72-55.17***
Yesterday’s close: Settled at 1483.1, up 2.9
Fundamentals: Gold has struggled to hold major three-star resistance, but today will be wholly fundamental. With Nonfarm Payroll due at 7:30 am CT, a miss or beat on jobs and wage growth will dictate how the metal finishes out what has otherwise been a constructive week. In the end, remember Gold has had an amazing year. Do not get stuck in the near-term forest and miss the longer-term trees; Gold is winding down a seasonally bearish time of year – patience will be rewarded.
Technicals: The technicals are straight forward and major three-star resistance has worked like a charm. Furthermore, we noted through the week that our momentum indicator caught up with price action this resistance level to begin taking some wind out of those near-term sails. It will be a constructive week if Gold can hold first key support and a bullish week if it closes out above major three-star resistance.
Resistance: 1484.9-1486***, 1500**
Support: 1469.2-1472.7**, 1459.8*, 1453.1-1454***