RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Coming into this morning’s trade we see the S&P E-mini down 13, the Dow Futures down 140 and the tech heavy NASDAQ is down 30.   There are a few reasons we are seeing a leg down in the equity markets.   GE, General Electric is down 10% over the last two days, continued delay on tax cuts and weak economic numbers out of China.   We are finished with earning season, so trade can now focus on what matters now to traders, economic numbers.   In addition to the above reasons for weakness in stocks is the uncertainty on exactly where the newly appointed Fed Chairman Powell stands in terms of rates.   We have not heard much out of him since he was appointed last week and that is making many investors gun shy not knowing where he stands on policy.  In terms of economic news, we have a full list throughout the week and tomorrow we have the ever so important CPI and retail sales both out at 7:30am Central.   The street is looking for up 0.2 and 1.7 respectively.  President Trump is wrapping up his Asia visit and has mentioned that he hopes to get the tax cut done soon, so traders should pay close attention to anything that comes off the tape in terms of tax cuts.   My belief is that if we do get a cut, the market will likely rally hard initially and probably taper off quickly.  Looking at technical levels in the S&P we are likely to see resistance near 2585-2587 and support near 2560.  If we should happen to see a break of key support at 2560, look for 2536 which happens to be the 50-day moving average come into play quickly.

Dec ’17 S&P E-mini Daily Chart

S&P E-mini Dec17 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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