A Top Heavy Equity Market

January 25, 2018 1:18PM CST

Asian shares were weaker, and were led by losses in the Nikkei due to the recent strength of the yen.  The GfK survey on German consumer confidence and the IFO survey on German business climate both came in better than forecasted.  European shares are having mixed results early with the German DAX under mild pressure, while the Italian MIB and Spanish IBEX 35 are posting moderate gains.  A highlight for global markets will come with the results of the European Central Bank’s latest monetary policy meeting which is forecast to have no change to either rates or policy.  The U.S. session will start out with a weekly reading on initial jobless claims that is expected to have moderate increase from previous 220,000 reading.

With a wide range outside day Wednesday, the market feels a bit top heavy and extremely overbought.  In fact, March E-mini S&P has closed higher in 14 of last 16 sessions.  Strong global growth prospects and strength in emerging markets are factors which helped support.  Traders seem to be growing more concerned with protectionist US policy could be a factor to spark a correction.  The trend remains up and bull camp has not been easily discouraged by trade war concerns, North Korea issues or even political wrangling in the US.  Support comes in at 2830 with resistance at 2876.

E-mini S&P 500 Index Daily Chart


RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.