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No Policy Change Likely Today at FOMC Meeting


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November 8, 2018

STOCK INDEX FUTURES

Stock index futures soared yesterday, which was the strongestpost-midterm election rally since 1982.

Initial jobless claims decreased 1,000 to 214,000 in the week ended November 3. Economists expected 210,000 new claims last week.

The Federal Open Market Committee will conclude its two day policy meeting today.

History has shown that U.S. equity markets after the midterm elections have a tendency to advancethrough year end and also into the following year. In addition, the third year of a presidential term is historically the strongest year for stock index futures.

In addition to the bullish historical tendencies for stock index futures after the midterm elections, there is the still relatively low interest rate environment that will provide long term underlying support.

CURRENCY FUTURES

The euro currency is lower after the European Union said the euro zone economy will cool this year and in the coming years, as global demand for the bloc's exports slow.

In addition, the euro was pressured after the European Commission cut its forecasts for Italian growth, citing investor concerns about the euro zone's third largest member's debts and economic outlook.

The Canadian dollar is lower on news that the Canadian housing starts trend decreased in October.

INTEREST RATE MARKET FUTURES

Today is the second day of the two day Federal Open Market Committee meeting.

Despite strong economic growth and the rise in average hourly earnings, the probability of a fed funds rate hike at the conclusion of todays meeting is 7%. The FOMC is expected to hold its federal funds target range at a range between 2.00% and 2.25%.

According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committees December 19 policy meeting is 81%, which compares to 80% yesterday.

SUPPORT AND RESISTANCE

December 18 S&P 500

Support 2795.00 Resistance 2823.00

December 18 U.S. Dollar Index

Support 95.810 Resistance 96.270

December 18 Euro Currency

Support 1.14270 Resistance 1.14880

December 18 Japanese Yen

Support .88030 Resistance .88470

December 18 Canadian Dollar

Support .76010 Resistance .76590

December 18 Australian Dollar

Support .7258 Resistance .7314

December 18 Thirty Year Treasury Bonds

Support 136^24 Resistance 138^0

December 18 Gold

Support 1218.0Resistance 1232.0

December 18 Copper

Support 2.7000 Resistance 2.7550

December 18 Crude Oil

Support 61.03 Resistance 62.68

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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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