The following Commodity Futures Market Analysis is the opinion of Optimus Futures. Click on the charts below to enlarge it.
S&P 500 Index
As we mentioned in last week’s report, while we appreciate the strong bullish momentum, the rapid acceleration in the recent past (more precisely the last two weeks) raises potential red flags for the on-going momentum, especially with some major round numbers including the 3000 level in vicinity.
We do not expect the market to be topping out just yet or reversing the long term up trend, but we do believe this market is due for a major correction, and the recent sharp spike to the upside could well be laying the foundations for it.
Light Crude Oil
Light crude oil Futures Market for the week continued with the bullish momentum creating a new high for the week as the market inches closer to the 70 round number.
Following the breakout from the 62.00 level a couple of weeks ago, the crude oil market has been able to build commendable momentum to the upside, clearing the path more for upside activity possibly in the coming weeks.
We see little major trouble areas for price before the 75.00 level which has, in the past, hosted major instances of support for the market back in August 2011. As price once again nears this area, we suspect that former support may flip into resistance allowing for some threatening selling activity to come into the market.
For the short to mid-term we continue to hold an upward bias for this market until we see major signs of trend exhaustion or major bouts of selling.
Gold commodity futures for the week traded at interesting levels as price tested the region above the more recent swing high near the 1350 level.
While we note that price was able to push past the recent swing high this week, we do not yet look at the move as a breakout as price was unable to sustain it and closed rather weak and bearish for the week – possibly indicating some resistance at the level.
Notably, we are also expecting some resistance to come in at the slightly higher 1370 level that lines up with older swing highs and could potentially cause trouble for price.
With a strong up trend matched up against strong resistance, the following week’s market action will be important and revealing as to the longer term direction for this market. Major selling coming in at this point could take prices much lower than current levels, while a strong break to the upside could allow price to use this resistance as a support launch pad to aim for higher price levels.
Euro Currency Futures
Euro currency futures for the week posted a new high although we did see some selling come into the market as price tried to breach the support and resistance at the 1.25 price level.
We note that the market has printed a strong looking bearish pin bar / hammer pattern off the 1.25 support and resistance level (see the next chart). However judging from the bullish momentum that saw price push past the crucial 1.21 major resistance (red dotted trend line) a while ago we suspect price may still continue to tick higher, inching ever closer to the more important price levels around the 1.27 mark that has previously served as a major area of support and resistance for price.
10-Year Treasury Bonds Futures
The 10 year US Bonds futures market over the past week posted some important price action, as the breakout below crucial former support was tested as proven resistance allowing prices to trickle down further – also allowing for a new fresh low for the week.
Although we witnessed former support prove its role as fresh resistance for price this week, we are yet to see a strong sustained move away from the present support levels as an authentic indication of sustained bearish momentum.
Notably, while we may appear to be past the important recent dual swing lows, we are still trading within a broader long term support zone that could trigger some buying to come into the market at these lows.
While we are positive about the recent move down for this market, we are nevertheless cautious of potential buying to come into the market. Although we would not be surprised to see price push further down below the broader support zone, eventually using it as solid resistance to restrict buying – allowing prices to dip further down.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
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