E-mini S&P (March)
Yesterday’s close: Settled at 3276, up 15.75
Fundamentals: U.S benchmarks closed at record highs yesterday and extended gains overnight ahead of Nonfarm Payroll at 7:30 am CT. The U.S-Iran situation has deescalated, top Chinese negotiator Liu He is set to visit Washington next week to sign the “Phase One” trade deal, the Fed thwarted a liquidity crisis and earnings are right around the corner. What is there not to love? Well, Nonfarm Payroll stands in the way today, but jobs have been plentiful, and this has broadly been one of the most consistent numbers for nearly a decade. In November, the Unemployment Rate regained 3.5%, the lowest in 50 years. All of this champions a consumer who is the heartbeat of this new bull market. Analysts expect a gain of 164,000 jobs and Average Hourly Earnings to increase by 0.3% while the Unemployment Rate holds steady at 3.5%. The data was solid this week and there will be an emphasis on Nonfarm Payroll to help offset a weak manufacturing sector. The Fed is expected to hold policy steady this year, meaning no more rate cuts to boost stocks. However, they expanded their balance sheet by more than 10% last year and there is no doubt this also buoyed the risk appetite. The Fed’s balance sheet is now approaching the $4.5 trillion record, can they keep this up? We maintain a narrative that this market needs to make a transition from Fed dependence to stronger data dependence
Technicals: Price action remains very healthy and the path of least resistance is higher. Our momentum indicators align with yesterday’s settlement to create today’s Pivots and the bulls are clearly in the driver’s seat while above here. Arguably, there is some unfinished business at Wednesday’s settlement prices as yesterday morning’s shallow pullback did not quite cover this gap. This area aligns multiple technical indicators to create major three-star support at 3259-3264 in the S&P and 8944.50-8952.50 in the NQ; a floor that defines this breakout leg.
Resistance: 3295**, 3304.75***, 3314.50**, 3346***
Support: 3259-3264***, 3248**, 3232.25-3235.25**, 3221.75**, 3208.75-3213***
Resistance: 9049**, 9100-9136.50***
Support: 8995.50**, 8944.50-8952.50***, 8890.25-8907.25***, 8848-8853***