RJO FuturesCast

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Indices

S&P Up on Tentative Deal to Avoid Another Government Shutdown

Posted 02/12/2019 9:45AM CT | Greg Perlin

Coming into the morning we see big gains across the board in indices.  The S&P 500 is up 19 at 2700, Dow futures is up 200 and the Nasdaq is up 50.  The reason for the big gains last night was congress agreed on a tentative deal to avoid another shutdown.  This was good timing because if no deal was struck, the government was set to shut down this Friday.   I don’t think this was a huge surprise because of all the backlash from the first shutdown and all the federal workers that were furloughed for a month.  I truly don’t think Trump could afford another repeat of that this time.   Another positive for stocks started yesterday where we saw a big move higher in the $ Yen which often tell traders that risk is back on.  Keeping with Japan, the BOJ announced they are cutting back on buying their bonds with duration of 10-20 year, the first time we have seen this since June of 2018.  Another positive for stocks which leads to a risk-on type of trade.  Looking at the S&P technically, bias is up where the market sees good support at the 100-day moving average which comes in at 2701 and change and resistance around 2751, which is the 200-day moving average.  The market is also waiting on Fed Powell speech which is 11:45 Am.   We also have two fed governors that speak after the market closes late this afternoon.   Traders should be looking to buy dips as the market is in a nice uptrend and should continue to watch headlines on any new developments on trade deals with China

E-mini S&P 500 Mar ’19 Daily Chart

E-mini S&P 500 Mar '19 Daily Chart

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Greg Perlin

Senior Market Strategist
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.
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