WHAT A DIFFERENCE A WEEK MAKES
Here are some random observations before we get into today’s analysis:
- Changes are abound in the markets – at least for a week.
- We saw a sharp turn in fortunes in equities – from last Fridays’ post-jobs numbers sell-off to this Friday’s morning’s growing overbought condition. Most of that rally appears to have been related to optimisim of continued dovish behavior by the US Federal Reserve. That idea was further strengthened following the release of the FOMC’s meeting minutes on Thursday.
- We saw other trends being reversed / nearly reversed this week – namely in sugar, coffee and wheat. Meanwhile, others remained in place – such as with soybeans and soybean meal.
- Only time will tell whether the rally in stocks will hold and whether these trend changes take hold. For now, let the technicals act as an alert to the potential changes in longer-term direction.
- Let’s go to the charts for more info on where things may be headed….Have a great weekend!
S&P futures post a torrid win streak since last Friday’s employment report
Recap of last week’s thoughts on the S&P e-Mini Futures:
- The S&P futures were testing support at 1885 when we wrote last week’s report.
- We recommended selling any rally to 1954 and using a close above 1960 as a stop-loss trigger.
Here’s an updated chart of the S&P e-Mini Futures:
Stocks started to rally, withstood any bearish challenges and continued their upside bias into the weekend this week.
As the chart above shows, there appears to be some important resistance in the 2015 – 2021 range for the S&P futures. That level is merely 0.5% above the trading levels at midday on Friday.
From our perch, there appear to be two possible scenarios for ...