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E-Mini S&P 500: Retracements may be healthy for a market!


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The post-election rally has supported the E-Mini S&P 500, and this month is full of speculation on just how much expansion and growth can one administration bring to the country! At this point, it is still unclear of the policies and the expansion that Presidential elect Donald Trump may bring to the office. Uncertainty is still the sentiment in the marketplace. The Dow Jones Industrial Average has still backed off and not penetrated that all-important 20,000 level. The sentiment may be cautious unless the Dow can penetrate the new level. The market took a bullish mode unless it is able to penetrate $2238.50. The range today for the (March) E-Mini S&P 500 was $2270.50 to $2248.50 an inside to lower day. Friday’s range could be an inside to lower to outside day around $2269.50 to $2239.50. Actually, we need the DOW to penetrate $20,000 for the ES to move higher. The financial sector and the Retail Sales may weigh on the market. Today’s Initial Jobless Claims for the week of January 7th was up 10,000 to 247,000 while the previous reading was 235,000. Continuing Claims were down 29,000 to 2.087 million with a one-week lag time. Import prices for December were 0.4 % while the previous reading was -0.3 %. Export price were 0.3 % while the previous reading was -0.1 %. China’s export data is due out tomorrow. We have some bank stocks reporting their earnings tomorrow as well. This market may need to retrace before it may be able to climb higher. Retracement levels to consider may be $2175.00 or $2129.00, which are not static levels. Sentiment may be cautious at this juncture and the momentum is not strong enough for a push higher yet perhaps. The retracements allow new entries for the bargain hunters and more momentum to spring a market higher.

The December Nonfarm Payrolls came in lower than expected at 156,000 while the previous reading was 178,000. The Unemployment Rate was up a bit to 4.7 % while the previous reading was 4.6 %. The Private Payrolls was 144,000 while the previous reading was 156,000. The Average Hourly Earnings was the bright spot at 0.4 % while the previous reading was -0.1 %. The Average Workweek was 34.3 hours compared to the previous reading of 34.4 hours. The International Trade Balance Level for November was -$45.2 billion while the previous reading was -$42.6 billion. Exports were down 0.2 % while imports were up 1.1 %. Factory Orders for November were -2.4 % while the previous reading was 2.7 %. The US Real Gross Domestic Product came in at 3.5 % above the forecast around 3.3 % for Q3f:2016 while the previous reading was 3.2 %. The GDP Price Index is 1.4 % unchanged. Consumer Spending which makes up about 70 % of the GDP only was 0.2 % in November below the 0.3 % forecast.

The EIA Petroleum Data Report showed Crude Oil inventories were up +4.1 million barrels. Motor Gas Oil was up +5.0 million barrels. API Petroleum Stock Recap for the Crude Oil was +1.5 million barrels. The Motor Gas Stocks was +1.7 million barrels. Kuwaiti officials announced that the production levels have been reduced to about 2.707 million barrels a day according to OPEC guidelines. There are projections of the US becoming an energy exporter, but details have not been released. Saudi Arabia is said to have cut production by more than 0.49 million barrels per day! Iran’s National Oil Company has been approved for a loan of one billion Euros from Vitol companies.

US President elect Donald Trump has investors believing in his “make America great again” slogan. His fiscal stimulus ideas to expand the economy has increased the positive sentiment of traders. His spending ideas could increase potential inflation, but that would add to the banking sector. Also his impact on banking regulations may spur the lending institutions higher. The Fed had previously mentioned that they do not see a great improvement in the unemployment rate. They forecast 4.5 % next year while November’s was 4.6 %. US President elect Donald Trump is to be inaugurated on January 20th and has claimed to introduce about $1 trillion in infrastructure investments with tax cuts for both individuals and corporations. The details have not been revealed to date but it will have to pass thru Congress. The next Fed meeting is January 31st 2017 in Washington. Yellen considers the current monetary policy as moderately accommodative. Fed Chair Janet Yellen is in Office until January 2018 and vows to stay her term until whereby the new administration may make changes or appoint a new chair. The sentiment toward Trumps election and office supports the US Dollar and may continue to do so. Export trade may be further impacted from the strength in the dollar.

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About the author


Deactivated Jul 9 2018

DeWayne Reeves is the founder of CFRN and host of a popular radio program heard daily in over 20 countries. A former equities trader, he has focused primarily on the S&P 500 Emini Futures Market for the past 5 years. His insights and trading methodology are a blend of traditional technical analysis and the strategic use of proprietary indicators. He is the founding director of New Hope Orphanage and Primary School in Kampala Uganda East Africa which is home to over 800 orphans. Mr Reeves currently resides with his wife in Phoenix Az. where he actively trades his personal account.

Tune in M-F from 11am-1pm Eastern for market analysis, technical tips and lively discussion. CFRN / www.cfrn.net

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