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E:Mini S&P 500: Holiday exhilaration rally?


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The E-Mini S&P 500 ran up to new highs as expansion and growth are in sight. The progress over the North American Free Trade Agreement builds hope for future business and a boost to the economy. There still are obstacles within the negotiations, but all parties continue to negotiate which is hopeful. Strong earnings also supported the move today. This week should be light on volume as we celebrate Thanksgiving on Thursday. Without great earnings or reports due out, the week should be rather calm but positive. 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 consumer is still confused by the tax reforms and who exactly will benefit.

Today's Chicago Fed National Activity Index for October was 0.65 while the previous reading was 0.17. Redbook Store Sales for the week of November 18th was 4.1 % while the previous reading was 2.3 %. Existing Home Sales SAAR were 2.0 % or 5.480 million while the previous reading was 5.390 million. Home sales are up but there is a shortage of homes for sale thus impeding the number that could be sold.

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. Inflation still remains a muted 1.7 % a far cry from the Feds 2 % target rate. 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 yet she has resigned upon the announcement of Jerome Powell, President Trump's pick.

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. 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)hit a high of $2600.00 to $2579.25 an inside to much higher day. The E-Mini S&P 500 is in a bullish stance unless it can penetrate $2555.50. Wednesday's range for the ESZ7 could be $2503.50 to $2585.50, an inside to higher or outside day. The VIX was down -8.64 % to $9.73. The VIX may trade inversely to the E-Mini S&P 500.

Today's API Crude Oil Stocks were a draw -6.4 million barrels. The API Motor Gas Stock was a build +0.87 million barrels. The projections for the EIA Report due out Wednesday is for Crude Oil Stocks forecast a draw -2.25 million barrels. The forecast for the Gasoline Stocks is a build +1.00 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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About the author


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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