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E:Mini S&P 500: Continuity is key...

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US President Donald Trump has selected Federal Reserve Governor Jerome Powell as Chairman of the Federal Reserve. Powell is noted as a dovish monetary policy that is thought to bring continuity to the Federal Reserve. He has been supportive of Chair Janet Yellen's gradual progression of monetary policy. The sustainable future with the US economy seems to be just a matter of continuing on the path we have been on. The Federal Open Market Committee found that the labor market has continued to strengthen and that the economic activity has been rising at a solid rate despite the hurricane disruptions. Household spending has been on an upswing despite the weather related problems. The Fed remains fairly accommodative thus supporting the labor market. The tax reforms and cuts would be the frosting on the cake of course. The tax reforms may be progressing but it becomes questionable who may benefit the most from the measures. The US Corporations may not have the same plans for the added benefits. The House did pass a budget bill to open the door to the tax reforms and cuts. The market may rocket back up upon the sentiment shifting toward the final tax reforms and cuts going to fruition. Inflation still remains a muted 1.3 % a far cry from the Feds 2 % target rate. The last employment report came in at -33,000 due to the hurricanes that tormented parts of the US. The December Fed meeting is scheduled December 12th - 13th. It is anticipated that a rate hike may be on the table for the December meeting. The hurricanes have caused destruction and in the near term will affect the economic activity. Higher energy costs due to the storms may boost inflation in the short term. Their stance was accommodative, but they intend to begin to wind down the quantitative easing in October by reducing its $4.2 trillion of holdings in US Treasury Bonds and mortgage backed securities. Expecting a tightening in the labor sector may over time boost wages as well thus contributing further to consumer spending. Inflation seems to still be baffling to the Fed, but may be addressed by an alteration of monetary policy. US Fed Chair Yellen's term ends on February 3rd 2018.

Today's Challenger Job-Cut Report for October was 29,831 announced layoffs while the previous reading was 32,346. The Initial Jobless Claims were down 5,000 to 229,000 while the previous reading was 233,000. The Continuing Claims were down 15,000 to 1.884 million. Nonfarm Productivity for Q3(p) 2017 was 3.0 % while the previous reading was 1.5 %. The Unit Labor Costs were 0.5 % while the previous reading was 0.2 %. The Bloomberg Consumer Comfort Index for the week of October 29th was 51.7 while the previous reading was 51.0.

Tomorrow, the Employment Report is due out for October. While September's was extreme, the forecast for this report is 325,000 perhaps to make up for the poor report of last month. The Nonfarm Payrolls was a shocking low of -33,000, a very dramatic result of the hurricane effects while the last monthly employment report showed 156.000. The Unemployment Rate was 4.2 % while the last reading was 4.4 %. Private Payrolls was -40,000 while the previous reading was 165,000. The Average Hourly earnings was 0.5 % while the previous reading was 0.1 %. The Average Workweek was 34.4 hours unchanged. Manufacturing payrolls were -1,000.00 while the previous reading was 36,000. Hospitality and leisure payrolls were down 111,000 while the bars and restaurants were down 104,700. The Participation Rate was 63.1 % while the previous reading was 62.9 %. The expansion of the US economy is both expected and welcome along with US President Trumps tax cuts and reforms. Of course, there is still the implementation of these cuts. There is a sentiment that the tax cuts may be of little worth to some. The GDP Price Index came in at 1.0 % while the previous reading was 1.0 %. The Real Consumer Spending was 3.3 % while the previous reading was 3.3 %. The strength of the market may be propelled by sentiment and the sentiment sets the stage for a higher trade. Once achieved, then a retracement may ensue. Any further sparring with North Korea can impact the market negatively along with any further doubt about the reforms and tax cuts projected by US President Donald Trump. The tax cuts and reforms seem to be stifled by the US budget deficit. The government runs on our tax dollars and the lack of those extra taxes cuts into what we pay down the deficit with. The US government needs to find additional revenue and that may be tricky. Economic growth may increase revenue, but that must come from expansion which has not come to fruition as of yet. The E-Mini S&P 500 seems unstoppable, yet this is the time to worry. This is the season where it may typically retrace. The fall is a time historically where the market has made some significant sell-offs, so this is the time to trade with caution. We remember black Monday in October of 1987.

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Today's E-Mini S&P 500 (December) traded $2578.50 to $2562.25 an inside to lower day. The E-Mini S&P 500 is in a bullish stance unless it can penetrate $2545.50. Friday's range for the ESZ7 could be $2586.50 to $2566.50, an inside to higher to outside day. The VIX was down -2.65 % to $9.93. The VIX may trade inversely to the E-Mini S&P 500.

The EIA Crude Oil Stocks were a draw -2.44 million barrels. The Motor Gas Stocks were a draw -4.02million barrels. The American Petroleum Institute reported the Crude Oil Stocks was a draw -5.1 million barrels. The Motor Gas Stocks were a draw-7.7 million barrels. Forecasts for tomorrow's EIA call for Crude Oil Stocks a draw -1.75 million barrels. The forecasts for Gas Stocks a draw -1.50 million barrels. OPEC Members are running about 92 % compliance with the cuts. OPEC seems to be keeping its vow to allow the production cuts to continue into next year. Energy analyst at Goldman Sachs projects that the estimated US Crude Oil demand may decline by about 900,000 bpd due to the impact of the hurricanes. Saudi Energy Minister agrees with UAE that it may be considered to extend the oil supply reduction past the March 2018 time frame.

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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 /

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