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S&P 500 and NASDAQ Futures at Record Highs


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November 27, 2017

STOCK INDEX FUTURES

S&P 500 and NASDAQ futures advanced to new historical highs. Shares of retailers are higher following a promising beginning to the holiday season and ahead of what is expected to be the largest U.S. online shopping day in history.

Republican lawmakers are rushing to secure enough votes to push through a tax plan in the Senate as early as this Thursday.

The 9:00 central time October new home sales report is expected to show 620,000 and the 9:30 November Dallas Federal Reserve manufacturing index is anticipated to 24.5.

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 fell to a nine week low and the euro currency advanced to a nine week high.

Some of the strength in the euro currency can be attributed to recent news that a German business confidence index compiled by the Ifo economic institute hit a record high in November. This index is another indication of strong growth in the euro zone's largest economy.

The Canadian dollar and the Australian dollar are higher in spite of weaker crude oil prices.

INTEREST RATE MARKET FUTURES

The Treasury will auction two and five year notes today.

Federal Reserve speakers today are Minneapolis Federal Reserve Bank President Neel Kashkari at 5:30 this afternoon and New York Federal Reserve Bank President William Dudley at 6:30 this evening.

Federal Reserve Governor Jerome Powell is scheduled to testify tomorrow before the Senate Banking Committee, which could be one of the least contentious confirmation hearings for a Federal Reserve chair nominee since the financial crisis.

The inflation issue has become more important after comments last week by current Fed Chair Janet Yellen when she expressed increasing doubts about the inflation outlook. She warned that there has been some hint that inflation expectations may be drifting down and that there could be risks to removing accommodation too quickly.

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 agree 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 increases.

SUPPORT AND RESISTANCE

December 17 S&P 500

Support 2593.00 Resistance 2606.00

December 17 U.S. Dollar Index

Support 92.320 Resistance 92.950

December 17 Euro Currency

Support 1.19170 Resistance 1.19880

December 17 Japanese Yen

Support .88540 Resistance .90380

December 17 Canadian Dollar

Support .78550 Resistance .78980

December 17 Australian Dollar

Support .7584 Resistance .7656

December 17 Thirty Year Treasury Bonds

Support 153^26 Resistance 154^28

December 17 Gold

Support 1284.0 Resistance 1305.0

December 17 Copper

Support 3.1200 Resistance 3.1850

January 17 Crude Oil

Support 58.12 Resistance 59.03

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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