Coverage for the week of August 28th – September 1st: In this week’s coverage, we analyze the pauses in the weekly charts of natural gas and E-mini Russell futures, and the rally in gold and soybean futures. We also examine the economic reports and earnings releases expected next week.
September E-Mini Russell 2000 Future Weekly Chart
The September E-mini Russell 2000 future found some support at the 52-week moving average as well as a downward sloping resistance line formed by connecting the high in December 2021 to the high in February 2023. The Russell also traded down to the 61.8% Fibonacci retracement level of the trend as measured by the low in May to the high in July. The RSI is in line with price and the MACD is poised to cross below its signal line – an indication that is generally treated as bearish. Should the Russell rebound, there are plenty of areas that could act as resistance: the 50% fib level (1869.5), the bottom of the Ichimoku cloud (~1885) and the 200-week moving average (~1900). A breakthrough of the supportive trend line could result in more bearish movement with possible support at the 76% Fib level (1791).
December Gold Future Weekly Chart
December gold futures showed an encouraging bullish rebound last week, trading back into the Ichimoku cloud and closing slightly above both the 52-week and the 200-week moving averages. Last week also saw the cross above the 50% fib retracement level of the trend as measured from the high in March of 2022 to the low in November of the same year. The RSI continues to trend downward along with the downtrend in price that started in March. The MACD recently turned negative complementing the MACD histogram, both bearish signals. A continuation of this rebound could see resistance at the top of the Ichimoku cloud (1968). Should the downtrend resume, support might be found at the 61% Fibonacci retracement level (1882).
November Soybeans Future Weekly Chart
The November soybeans future showed a bit of a rally on the weekly chart last week. Continuation buying resulted in a second consecutive up week, after finding support at the 52-week moving average that coincided with the top of the Ichimoku cloud study. While RSI followed price closely, longer term bearish divergence could be in effect, as highs in soybeans from April to July remained relatively constant, whereas highs in the RSI declined. The MACD study shows a bullish state as both the MACD and its histogram are above zero. Should this bullish trend continue 1435 is an upside target, representing the high from April. A pullback could find support at around 1305, the top of the Ichimoku cloud; further support could be 1200, the 23% fib retracement level.
October Natural Gas Future Weekly Chart
October natural gas futures experienced a pause last week, forming a doji (open price equals close price) in the middle of a range that has been present since June (2.36 – 3.07). This usually shows indecision as buyers nor sellers can advance their cause. Natural gas is well below the 52-week moving average, 200-week moving average, and the Ichimoku cloud. The MACD, while still negative, has a positive histogram showing more indecision. The RSI at 39 is at the lower end of the scale and could be showing some bullish divergence with increasing Lowe's while natural gas trade sideways. A move to the upside could experience resistance at the top of the trading range (3.07) and further at the high in March (3.73). If natural gas resumes a downward trend, support could be found at the bottom of the channel (2.36).
Companies Reporting Earnings August 28th – September 1st
| Date | Companies Earnings |
|---|---|
| Monday, August 28th | N/A |
| Tuesday, August 29th | Best Buy Co., Inc. (BBY): $1.06 EPS Estimate, $9.51B Revenue Estimate (BMO) Bank of Montreal (BMO): $2.28 EPS Estimate, $5.99B Revenue Estimate (BMO) Bank of Nova Scotia (BNS): $1.28 EPS Estimate, $6.05B Revenue Estimate (BMO) J.M. Smucker Co. (SJM): $2.07 EPS Estimate, $1.84B Revenue Estimate (BMO) HP Inc. (HPE): $0.85 EPS Estimate, $12.30B Revenue Estimate (AMC) |
| Wednesday, August 30th | Salesforce (CRM): $2.00 EPS Estimate, $7.84B Revenue Estimate (AMC) Chewy, Inc. (CHWY): ($0.03) EPS Estimate, $2.76B Revenue Estimate (AMC) Victoria’s Secret & Co. (VSCO): $0.27 EPS Estimate, $1.44B Revenue Estimate (AMC) |
| Thursday, August 31st | Dollar General Corporation (DG): $2.49 EPS Estimate, $9.94B Revenue Estimate (BMO) Campbell Soup Co. (CPB): $0.50 EPS Estimate, $2.07B Revenue Estimate (BMO) Canadian Imperial Bank of Commerce (CM): $1.25 EPS Estimate, $4.22B Revenue Estimate (BMO) Hormel Foods Corp. (HRL): $0.41 EPS Estimate, $3.07B Revenue Estimate (BMO) lululemon athletica inc. (LULU): $2.53 EPS Estimate, $2.17B Revenue Estimate (AMC) Dell Technologies (DELL): $1.14 EPS Estimate, $20.86B Revenue Estimate (AMC) |
| Friday, September 1st | N/A |
Commentary: Canadian banks continue the transition of earnings season from U.S. to Canadian companies, as Bank of Montreal and Bank of Nova Scotia report on Tuesday morning, and CIBC on Thursday morning.
Retail companies Best Buy (Tuesday morning), Chewy (Wednesday afternoon) and Dollar General (Thursday morning) could provide insight into the retail segment of the economy. Food makers J.M. Smucker (Tuesday morning), Campbell Soup and Hormel Foods (both Thursday before market open) could give a glimpse into food portion the inflation situation.
Tech is represented by HP (Tuesday after market close) and Dell Technologies (Thursday after markets). Clothing companies Victoria’s Secret (Wednesday afternoon ) and lululemon (Thursday afternoon) could provide more insight into the retail sector.
Economic Reports for the week of August 28th – September 1st
| Date | Economic Reports |
|---|---|
| Monday, August 28th | 10:30 AM ET: Dallas Fed Manufacturing Survey 11:00 AM ET: Export Inspections 4:00 PM ET: Crop Progress |
| Tuesday, August 29th | 9:00 AM ET: Case-Shiller Home Price Index 9:00 AM ET: FHFA House Price Index 10:00 AM ET: JOLTS * 10:00 AM ET: Consumer Confidence 4:30 PM ET: API Weekly Oil Stocks |
| Wednesday, August 30th | 7:00 AM ET: MBA Mortgage Applications 8:00 AM ET: Bank Reserve Settlement 8:15 AM ET: ADP Employment Report 8:30 AM ET: GDP *** 8:30 AM ET: International Trade in Goods and Services 8:30 AM ET: Corporate Profits 8:30 AM ET: Wholesale and Retail Inventories (Advance) 10:00 AM ET: Pending Home Sales Index 10:30 AM ET: EIA Petroleum Status Report 11:00 AM ET: Survey of Business Uncertainty |
| Thursday, August 31st | 3:15 AM ET: Atlanta Federal Reserve Bank President Raphael Bostic Speech 7:30 AM ET: Challenger Job-Cut Report 8:30 AM ET: Personal Income and Outlays 8:30 AM ET: Jobless Claims *** 8:30 AM ET: Export Sales 9:45 AM ET: Chicago PMI 10:30 AM ET: EIA Natural Gas Report * 3:00 PM ET: Farm Prices 4:30 PM ET: Fed Balance Sheet |
| Friday, September 1st | 6:00 AM ET: Atlanta Federal Reserve Bank President Raphael Bostic Speech 8:30 AM ET: Employment Situation *** 9:45 AM ET: PMI Manufacturing Final * 10:00 AM ET: ISM Manufacturing Index 10:00 AM ET: Construction Spending 1:00 PM ET: Baker Hughes Rig Count 3:00 PM ET: Grain Crushings 3:00 PM ET: Fats & Oils |
*** Market Moving Indicators
* Merit Extra Attention
Commentary: Wednesday morning, 8:30 AM ET sees four reports releasing simultaneously, with GDP providing the most impact. Inventory as well as International Trade information should not be ignored, as those reports can move markets too.
The housing market is in focus as Case-Shiller Home Price and FHFA Home Price both arrive Tuesday at 9 AM ET; MBA Mortgages Wednesday is at 7 AM ET and Pending Home Sales is at 10 AM ET Wednesday. The labor market sees some activity on the reporting front as JOLTS is dropped Tuesday at 10 AM ET, ADP Employment arrives at 8:15 AM ET Wednesday, Challenger Job Cuts at 7:30 AM ET and Jobless Claims at 8:30 AM ET on Thursday, and the Employment Situation at 8:30 AM ET Friday.
Manufacturing is covered this week with Richmond Fed Manufacturing on Tuesday morning, PMI Composite Flash on Wednesday morning, and Kansas City Fed Manufacturing on Thursday morning.
In the manufacturing sector, the Dallas Fed reports Monday at 10:30 AM ET, Chicago PMI comes at 9:45 AM ET on Thursday, and PMI and ISM are released at 9:45 AM and 10 AM ET Friday, respectively. At the time of writing, the only known Fed speaker is Raphael Bostic at 3:15 AM ET Thursday; be aware that more Fed members could speak at any time, and could introduce volatility into the markets.
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