RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The S&P continues to climb the wall of worry, even though the all-important tax cuts have yet to be announced. We have entered uncharted territory and reached all-time highs this morning, hitting 2608.50 just a few minutes ago. What’s more interesting is that the Chinese Stock Market has pulled back considerably since last week showing weakness in all sectors. Last week, we saw a report from the FOMC minutes which interestingly reported that many fed officials are getting increasingly concerned about the lack of inflation that still persists in the US. Very strange that we see the unemployment rate near 4% and inflation still below the fed is looking for. One thing I am seeing is the yield curve is continuing to flatten where 2/5 years notes going higher in yield and the 30-year bond going lower in yield higher in price. Normally when we see this happen, a recession is all but priced in. Looking at noteworthy events today, the new Fed Chairman Powell is supposed to have his confirmation so be on guard for any highlights that come from the announcement. We also have a few fed speakers on tap, so be on guard for any verbiage on rates. Technically, we are overbought in the Dec E mini SP with RSI readings approaching 70. The basics of RSI are pretty simple to use. When you see a reading over 70, the market is short term overbought and a reading under 30, the market is short term oversold. It doesn’t mean the market is going to turn if those levels are reached but more should put traders on alert that market may continue to rise or fall but at a slower pace. I see resistance in Dec SP at 2611-2613 and support near the buck 2600 with a brake of support leading to a test of 2592.


Dec ’17 E-Mini S&P 500 Daily Chart

Dec '17 E-Mini S&P 500 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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