Daily Comments

 

February 22, 2019

 

S&P

The S&P has opened higher on the session as traders remain optimistic of an upcoming China trade deal. President Trump will meet with the top Chinese negotiator later this afternoon and there’s talk the March 1st deadline to raise tariffs will either be pushed back or eliminated. As long as the Fed holds its overall dovish bias, traders will be willing to chase any sort of positive news items. The trouble going forward is if all this news is already baked into the market. The surprise element is not so much for further rallies but for disappointment in its bullishness. Remember we have a very narrow base of stocks that are movers and if a few start to take a day off, that’s when the trouble can start.
For today, the market shook off yesterday’s correction,so let’s make yesterday’s low a new line in the sand not to cross. Resistance still lies at 2790-2800 and it may take a few attempts to get through and push on to new highs.

 

CRUDE OIL

Crude prices are higher on the session, putting as much pressure on the bears as they can. Favorable economic vibes along with increased Chinese demand ties in favorably with the undercurrent set by OPEC and Russia to reduce price volatility, pushing prices higher longer term. Even with record shale production the market is finding its balance. One must also be careful not to overlook record crude exports.
For today, the market still seems to have room to run. The next target level is $60-$62. Support moves up to $55.50-$56

 

10-YEAR TREASURY NOTES

Treasury Notes are trading higher on the session in what appears to be a slight market correction from yesterday’s declines. Yesterday’s market focus seemed to center on the idea the Fed minutes that were released on Wednesday were less dovish than previous and that there was still some tightening to do later in the year. Trump meets with the top Chinese negotiator later today and there’s a feeling an agreement in principle is getting close. If true, we could see an exit out of safe haven treasuries with the thought of improving global economic growth.
For today, the market is sort of in the middle here and I would stay away from placing a bet on direction for now.

 

GOLD

Gold prices are higher on the session as the market makes a minor comeback after yesterday’s sharply lower close. The focus changed rather quickly in that traders jumped on the idea the Fed will not be as dovish as hoped and that would support the Dollar and put pressure on Gold. But there’s a long way to go yet in oreder to see in what direction the economy heads and if the fed has further work to do in its tightening policy.
For today, the market needs to climb back over 1336-1340 to reclaim its bullish path. Support at 1320-1324 should be retested.

 

SOYBEANS

Soybeans prices are doing much on the session as traders seem to be taking a show me attitude to any further China trade news. If that’s the case, the upside is once again limited by the massive global supply. Resistance up to 930 and support down to 890

 

 

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