After yesterday’s plunge in all indices, we are seeing a bit of a risk-on trade this morning with the E-mini S&P up $7 at 2730, the Dow futures up 50 and the tech heavy Nasdaq up 32 at 7104.   A tweet from POTUS earlier in the morning somewhat threating Harley Davidson, saying if you leave the US and take production overseas it will be the beginning of the end for the company.  Harley is saying due to tariffs imposed, they might be forced to take the company overseas.   So, we will see how the day shapes out for this particular stock. 

Yesterday trade action did do some damage to charts as the S&P is now below some key moving averages.   The trade is solely focused on trade tensions with China and traders should be prepared for continued volatility as both sides continue to threaten more tariffs.  As Trump continues with the threats, China retaliates with letting the yuan continue to depreciate.  Today shapes up to be an interesting day as the Japanese yen is down half penny and treasuries are showing some weakness which looks to lend some support to the S&P after the last ten days of weakness that has occurred.  

Later today we have two Fed speakers at noon central and we also have a two-year auction at noon.   Levels to watch in the S&P on the upside is 2734-50 and 2745 and on downside expect some support 2700.50 which was yesterday low. 

E-mini S&P 500 Sep ’18 Daily Chart

E-mini S&P 500 Sep '18 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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