E-mini S&P 500 Futures (June)
Last week’s close: Settled at 2779.75, up 44.75 on Thursday and up 297 on the week
Fundamentals: The S&P 500 gained 12% in its best week since 1974. The historic surge comes on the heels of a 36% plunge from record highs and has hardly been celebrated. Thursday’s session tacked on 1.6% after the Federal Reserve found a new kitchen sink to throw at the beleaguered economy and despite a 3-week tally of unemployment claims topping 16 million. With rates already at zero, the Fed helped secure a bottom in equity markets on March 23 by unleashing QE-infinity. A move that was lauded as unprecedented set the stage for unlimited buying of U.S Treasuries and mortgage-backed securities. The committee topped themselves with their well-timed announcement Thursday on plans to lend as much as $2.3 trillion, drowning out the fresh 6.606 million Initial Jobless Claims and counting. The program essentially allows the Fed to buy those small business loans recently announced by Washington as well as junk debt. Although the news boosted equity prices, the S&P finished 1% from its session high.
U.S benchmarks are all lower by about 1% ahead of the bell as earnings season comes into focus. OPEC+ reached a historic deal over the weekend, but it underwhelmed and crude oil is little changed from its late Friday weakness After some volatility on the open last night where the S&P quickly lost 3% before settling in, it has been an otherwise quiet Easter Monday session with much of Europe closed for the holiday. Today’s calendar is light but tomorrow we look to JPMorgan, Wells Fargo and Johnson & Johnson.
Technicals: The S&P and NQ are working to recover from the worst of the session. Through last week’s strength a few observations stand out. First, the S&P did trade through but couldn’t close above the 50% retracement on the entire February through March range at 2785; this will continue to be a crucial level. Although, the NQ has struggled at a similar level at 8205.75 and it did close as high as 8227.50, strength Wednesday and Thursday certainly lagged the S&P. The NQ outpaced the S&P initially, does this begin to exude near-term exhaustion? Lastly, there are well-defined floors aligning crucial technical levels with what was a ceiling late March; only a close below 2635.75-2642 and 7995-8012 will opened the door to heavy selling. As for today, price action has more or less been tethered to our momentum indicators through much of the overnight given that Europe is on holiday. These levels come in this morning at 2752.25 in the S&P and 8170 in the NQ; price action above or below here will favor a slight edge. To the downside, the S&P hasn’t tested Wednesday’s close of 2735 intraday and there is a retracement level at 2720.25; this area held last night and provides technical support that defines the immediacy of the uptrend and a potential buy the first test trade.
Resistance: 2785****, 2809.50-2819.50*, 2846-2854.25***, 2930-2953.75****
Support: 2720.25-2735**, 2667**, 2635.75-2642***, 2620.75*, 2573***, 2530-2549**, 2482.75-2496.75****
E-mini Nasdaq Futures (June)
Resistance: 8205.75-8227.50**, 8320.25***, 8495***, 8578-8623***
Support: 8073.25**, 7995-8012***, 7926-7950**, 7851.75**, 7739.50-7750**, 7660-7686****