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E:Mini S&P 500: A bit of bitcoin to make things interesting.

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The CME Group Exchange is seeking to launch a bitcoin contract this last quarter. There is much apprehension about the allocations moving over to the new currency in their allocations. When the E-Mini S&P 500 was introduced, it drew the participation of major firms and speculators alike. It took away the need to trade the large S&P 500 contract, but the volume soared on the smaller contract. The exchanges have books filled with the contracts of products that never produced volume after their launch. It may do well in volume with so much interest, but should only be supportive of the E-Mini S&P 500 and Gold even. Diversification may be most appealing from the large institutions and the retail client as well. Currency fluctuations have moved the markets for years. Cheaper currencies make other products less costly. The Bitcoin currency has even been noted as preferred by millennials instead of Gold for example. Bitcoin should do well under the governess of the exchanges and regulatory bodies. The unregulated Bitcoin still may have safe-haven issues. The appeal for traders to trade their favorite product under one house, regulated by the same bodies may have more universal appeal to traders. The reaction may be similar to when paper money replaced Gold currency.

Inflation is on the rise and retail sales is making a comeback. Yet still there is the question of global growth and the tax reforms coming to fruition. It will be interesting to see if this stock market can hold up if the data is weak and the forecasts or sentiment is for the interest rate hike in December. The country awaits the long overdue tax reforms and cuts promised during the campaign of US President Donald Trump with nervous apprehension. The consumer is still confused by the tax reforms and who exactly will benefit. The US House of Representative has been forming the structure and implementation of a US tax code as promised by US President Donald Trump. The tax bill written would increase the US deficit by $300 billion. While the vote seemed to welcome the boost to the US economy, Fitch, a credit rating agency, believes that the tax plan may stimulate growth, it may also lead to hefty fiscal deficits. The federal deficit for 2017 alone equals around $666 billion. US deficit total may exceed $20 trillion. The house bill is introduced with the idea that new government revenues may absorb some of the deficit. The tax cuts may appeal to certain groups but not necessarily the low income or middle class. The Republicans usually guard against increases in the federal deficit, so this becomes more complicated.

Today's MBA Mortgage Applications Composite Index for the week of November 10th was 3.1 % while the previous reading was 0.0 %. The Purchase Index was 0.4 % while the previous reading was 1.0 %. The Refinance Index was 6.0 % while the previous reading was -1.0 %. The Consumer Price Index for October was 0.1 % while the previous reading was 0.5 5. The CPI excluding food and energy was 0.2 % while the previous reading was 0.1 %. Retail Sales for October was 0.2 % while the previous reading was 1.6 %. The Retail Sales excluding autos was 0.1 % while the previous reading was 1.0 %. The Retail Sales excluding autos and gas was 0.3 % while the previous reading was 0.5 %. The Empire State Manufacturing Survey General Business Conditions Index for November was 19.4 while the previous reading was 30.2. The Atlanta Fed Business Inflation Expectations for November were 2.0 % while the previous reading was 1.8 %. The Business Inventories for September were 0.0 % while the previous reading was 0.7 %.

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 1.7 % a far cry from the Feds 2 % target rate. 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.

The Nonfarm Payrolls for October were 261,000 new jobs created under expectations while the previous reading was a meager -33,000 new jobs created. The Unemployment Rate was 4.1 % while the previous reading was 4.2 %. The Private Payrolls were 252,000 while the previous reading was -40,000. Manufacturing Payrolls was 24,000 while the previous reading was -1,000. The Participation Rate was 62.7 % while the previous reading was 63.1 %. The Average Hourly Earnings were 0.0 % while the previous reading was 0.5 %. The Average Workweek was 34.4 hours unchanged. 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 $2577.00 to $2555.50 an inside to lower day. The E-Mini S&P 500 is in a bearish stance unless it can penetrate $2594.00. Thursday's range for the ESZ7 could be $2575.50 to $2552.50, an inside to lower to outside day. The VIX was up +13.29 % to $13.13. The VIX may trade inversely to the E-Mini S&P 500.

The EIA Crude Oil Stocks were a build of +1.85 million barrels. The EIA Motor Gas Stocks were a build of +0.89 million barrels. The API Crude Oil Stocks were a build of +6.5 million barrels. The API Motor Gas Stocks were a build of +2.4 million barrels. OPEC's Secretary General does not see any problems extending the cuts thru March of 2018. 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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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.

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