RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

U.S. stock indices are bumping up against resistance into week’s end as uncertainty surrounding the coronavirus situation continues. The March e-mini S&P is 58 points higher on the week but has struggled at the 3380 level during Thursday and Friday’s trade. Furthermore, implied volatility is at -5%, indicating levels of complacency are still high in the stock market at a time when the VIX remains elevated above 15.00. This tells me that funds are hedging while they are still mindlessly piling into an overvalued stock market. Gold prices and interest rates would support this hypothesis. Going into a three-day weekend, I would be weary about long exposure at these levels given the elevation in coronavirus cases in Hubei this week. However, adding fuel to the bull camp is the confidence that investors have in aggressive central bank support. Should U.S. stock observe a 3-5% correction, the Fed is likely to step in and speak about further rates cuts and quantitative easing. Support in the March S&P is seen at 3356 and below there at 3314.50. The Russell 2000 remains the weakest of the main indices.

E-Mini SP 500 Mar ’20 Daily Chart

Ian Bannon

Ian’s interest in trading began with the stock market after graduating from Purdue University with a degree in Economics and a focus in international business. A natural strength for numbers, trends, and pattern recognition, in conjunction with a curiosity to understand the big picture has enabled a desire to understand market behavior. Ian managed his own stock account before moving into the futures arena because of the wide scope of trade-able sectors and the ample amount of fundamental support behind these larger-scope markets.