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Trade The Long Side of Flight to Quality Vehicles


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STOCK INDEX FUTURES

U.S. stock index futures pulled back further from the record highs that were hit just two weeks ago on hopes of a trade agreement and a positive first quarter corporate earnings season.

Stock index futures are sharply lower today, as trade tensions worsened. Beijing announced plans to place new levies on $60 billion in U.S. goods on June 1.

I believe the harder the decline is now due to trade issues, the faster and sharper the advance will be after a trade deal is reached.

Until then, however, at this time it is best to avoid stock index futures and instead focus on the long side of flight to quality vehicles, such as the Swiss franc, the Japanese yen, the interest rate futures market and gold.

CURRENCY FUTURES

The flight to quality currencies, the Swiss franc and the Japanese yen, are the main beneficiaries of the escalating trade issues between the U.S. and China.

The Australian dollar is lower after a report showed the number of Australian home loan approvals fell 2.5% in March from February, according to the Bureau of Statistics. Economists expected a 0.5% fall for the month.

The Chinese yuan fell to a 2019 low on the U.S.-China trade setback. The yuan has declined for six consecutive days and some analysts believe it will breach the seven per dollar level in coming months.

INTEREST RATE MARKET FUTURES

A flight to quality flow of funds is coming into the interest rate futures markets.

Financial futures markets are predicting there is a 70% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points, or more at its December 11 policy meeting, which compares to 64% on Friday.

BITCOIN

Bitcoin continued to advance, holding onto gains over the weekend. Bitcoin jumped more than 10% on Saturday and is up over 90% year to date, increasing to a nine month high of $7,585.00 on Sunday.

SUPPORT AND RESISTANCE

June 19S&P 500

Support 2818.00 Resistance 2872.00

June 19 U.S. Dollar Index

Support 96.740 Resistance 97.210

June 19Euro Currency

Support 1.12490 Resistance 1.13030

June 19Japanese Yen

Support .91230 Resistance .92050

June 19Canadian Dollar

Support .74340 Resistance .74730

June 19Australian Dollar

Support .6960 Resistance .7011

June 19 Thirty Year Treasury Bonds

Support 148^16 Resistance 149^24

June 19Gold

Support 1281.0 Resistance 1309.0

July 19Copper

Support 2.7100 Resistance 2.7800

June 19 Crude Oil

Support 61.11 Resistance 63.88

Contact Alan for more extensive information on these markets 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 information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. 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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