Developing Themes in Stock Futures

February 20, 2018 10:51AM CST

Coming into this morning, the S&P had made two days of higher lows and has looked good. However, today we see weakness led by bellwether stock Wall Mart which is down 10$ or almost 10% trading last at 94.71 and is weighing heavy on all indices. This has had the most effect on the Dow which is currently down 183 points at 20,035.  Traders should continue to watch other markets and see if there are any correlations that suggest further weakness or more bottoming action as the week progresses.  Traders should also continue to watch Treasuries as the yield continues to march up to the ever important 3% level which some say if we penetrate that level on the upside, stocks will start to look expensive.   Another important theme that supported stocks last week was weakness in the dollar.  The dollar made new lows against the yen and new highs against the euro which somewhat contradicts the move up in Treasury yields as the fed is on target to raise the fed funds rate next month.  So many interesting themes are developing so stay tuned to my articles for the latest on what is driving the markets, especially the S&P. 

Looking at the technicals in the SP, I see resistance at 2754 and more at 2763 which should cap any rally.  On the downside, I would continue to watch the dips; if we see prices hit an objected level on the downside of 2697 I would consider a stop under 2688, looking for a retest of the two week high of 2763.  Continue to be nimble as volatility has picked up, so patient traders should keep levels of interest in play as the Vix has woke up from hibernation.

E-mini S&P 500 Mar '18 Daily Chart

e-mini_s&p_mar18_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.