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Budget Agreement Supports Stock Index Futures


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February 9, 2018

STOCK INDEX FUTURES

The U.S. Congress voted to end the brief shutdown earlier this morning. The House joined the Senate in passing the budget legislation that would fund the government through March 23.

The 9:00 central time December wholesale trade report is expected to show a .2% increase.

In spite of the recent correction, I am not seeing the beginning of any new long term bear market for stock index futures.

CURRENCY FUTURES

The U.S. dollar is higher, but did not make new highs for the move.

In the longer term, lower prices are likely for the greenback, as interest rate differential expectations are likely to undermine the U.S. dollar.

The euro currency is a little lower today. However, longer term the currency of the euro zone will be underpinned by the belief that the European Central Bank will remove some of its accommodation later this year and may actually hike interest rates in the first quarter of next year.

The main trend for the currency of the euro zone is higher.

The British pound fell after the European Unions chief negotiator said a Brexit transition period wasnt a given if disagreements with the U.K. continue.

In addition, there was some pressure on the pound on news that the U.K. trade deficit widened in December.

INTEREST RATE MARKET FUTURES

The thirty year Treasury bond futures tested yesterdays lows, which were the lowest levels since April 2015.

There was some pressure on futures when Reserve Bank of Kansas City President Esther George said it's important to press forward with rate increases.

The probability of a fed funds rate increase at the FOMCs March 21 policy meeting is 75%, which is unchanged from yesterday.

The long trend for futures is lower, especially for the thirty year Treasury bond futures.

SUPPORT AND RESISTANCE

March 18 S&P 500

Support 2573.00 Resistance 2629.00

March 18 U.S. Dollar Index

Support 89.950 Resistance 90.450

March 18 Euro Currency

Support 1.22450 Resistance 1.23260

March 18 Japanese Yen

Support .91540 Resistance .92450

March 18 Canadian Dollar

Support .78720 Resistance .79810

March 18 Australian Dollar

Support .7746 Resistance .7839

March 18 Thirty Year Treasury Bonds

Support 143^12 Resistance 144^20

April 18 Gold

Support 1312.0Resistance 1328.0

March 18 Copper

Support 3.0400 Resistance 3.0900

March 18 Crude Oil

Support 61.09 Resistance 61.23

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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