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Better Earnings Support Stock Index Futures


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November 21, 2017

STOCK INDEX FUTURES

Stock index futures are being supported by upbeat results from some retailers, along with the belief that the global economy is strengthening.

The National Activity Index from the Federal Reserve Bank of Chicago in October was .65, which compares to .36 in September.

The 9:00 central time October existing home sales report is expected to show 5.44 million.

At 5:00 Federal Reserve Chair Janet Yellen will participate "In Conversation with Mervyn King," which includes an audience question and answer session.

Historically stock index futures have shown a tendency to advance in the week of the Thanksgiving Day holiday.

The computer models that I use continue to generate bullish signals for stock index futures.

The main trend for stock index futures is higher.

CURRENCY FUTURES

The U.S. dollar is firmer and the euro currency is lower again after the weekend collapse of coalition talks in Germany.

The British pound is higher after U.K. manufacturing orders surged by the most in almost three decades, which were helped by export demand.

The Confederation of British Industry said its monthly factory index increased to 17 from minus 2 in October, which is the highest level since August 1988.

The Canadian dollar is higher in spite of news that wholesale transactions in Canada fell 1.2% on a seasonally adjusted basis in September, which compares to market expectations of a .6% increase.

INTEREST RATE MARKET FUTURES

Other than Fed Chair Yellen there are no other Federal Reserve speakers scheduled for today.

Yesterday Yellensaid she will resign her position on the board of governors once her nominated successorJerome Powell takes over next February.

According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 12-13 meeting is better than 99%.

I am totally on board with the consensus view that the FOMC will hike rates next month.

However, I expect only two fed funds rate increases in 2018, while some analysts are predicting three or more rate hikes in 2018 and the Fed is currently predicting three interest rate hikes.

SUPPORT AND RESISTANCE

December 17 S&P 500

Support 2576.00 Resistance 2596.00

December 17 U.S. Dollar Index

Support 93.770 Resistance 94.160

December 17 Euro Currency

Support 1.17210 Resistance 1.17880

December 17 Japanese Yen

Support .88730 Resistance .89270

December 17 Canadian Dollar

Support .77830 Resistance .78340

December 17 Australian Dollar

Support .7523 Resistance .7593

December 17 Thirty Year Treasury Bonds

Support 153^18 Resistance 154^24

December 17 Gold

Support 1273.0 Resistance 1286.0

December 17 Copper

Support 3.0800 Resistance 3.1250

January 17 Crude Oil

Support 56.13 Resistance 57.03

For more information about these markets, please contact Alan at 312.242.7911 or via email at alan.bush@admis.com. Thank you.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.



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About the author


Alan Bush has been a commodity analyst since 1976 focusing on the fundamental and technical aspects of stock index, interest rate and foreign currency markets. He has authored several articles for Stocks Futures and Options magazine and produced the “Futures Tech Focus” program, which is a technically based market outlook.

Alan served on the faculty of Oakton College as instructor of a course entitled, “Principles of Technical Analysis.” He has been interviewed on many national television programs, appearing on the Nightly Business Report, CNBC, CNN Moneyline, Reuters Television and Web FN. In addition, he has been frequently quoted in The Wall Street Journal, USA Today, The Bond Buyer and the Chicago Tribune and has been regularly interviewed on Chicago’s WMAQ radio business reports.

Alan can be reached at (312) 242-7911, or via email at alan.bush@admis.com.

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