In this week’s coverage, we analyze the bullish trends in E-mini S&P 500 and British pound futures, the bearish trend in natural gas futures, and the consolidation in British pound futures. We also examine the economic reports expected next week.
Commentary and charts reflect data at the time of writing. Market conditions are subject to change and may not reflect all market activity.
March E-Mini S&P 500 Index Futures Weekly Chart
March E-mini S&P 500 Index futures continued the rally that began at the beginning of November, taking out the recent high from the last week in July. The E-mini S&P 500 closed above the 76.4% Fibonacci retracement level of the downtrend from January to October 2022. MACD recently experienced a bullish cross by crossing above its signal line. That relationship is widening, which indicates a continuing bullish trend. RSI is getting closer to being overbought at 70, though bearish divergence might be in play as the RSI is lower than its peak in August, even though price has taken out the high in August. This could indicate that momentum is weakening, and a reversal might occur. If the bullish trend continues, resistance might be found at the April 2022 high of 4,860. A reverse to the downside could find support at the 61.8% Fib level (4,530) and at the 52-week moving average (~4,400).
January Natural Gas Futures Weekly Chart
January natural gas futures continued its sixth consecutive bearish week, though the small body candle with a long wick at the bottom suggests that buyers might be coming in to lift this market. RSI is poised to cross below the oversold level of 30, but beware: trending markets can stay overbought for an indefinite length of time before reverting. The MACD recently experienced a bearish cross of its signal line. If this market reverses up, look for resistance at the 52-week moving average (3.57)and further at the 23.6% Fibonacci retracement level (~3.90). Support may find support at the low of this week (~2.20).
March British Pound Futures Weekly Chart
March British pound futures’ uptrend may have morphed into consolidation mode, as last week’s gains almost retraced the previous week’s losses. Support at the 52-week moving average coincides with the top of the Ichimoku cloud AND the 50% Fibonacci retracement level of the downtrend that began in June 2021 and ended in October 2022. RSI is trading in concert with price, though the MACD recently showed a bullish cross. Should the reversal continue further up, resistance might be found at the 61.8 % Fib level (1.288). A break down into the Ichimoku cloud might see some support at the 38.2% Fib level (1.196).
February Gold Futures Weekly Chart
February gold futures was up from the previous week, with the 52-week moving average holding as support. Gold remained inside the Ichimoku cloud, and found resistance at the 61.8 % Fibonacci retracement level of the previous downtrend that began in May and culminated in October. The RSI turned down with price to a neutral reading of 52. MACD remains slightly bullish as it is positive and is above its signal line. Should this minor rally continue, expect resistance at the top of the Ichimoku cloud and at the 76.4% Fib level (2,089). If gold trends downward, look for support at the 200-week moving average (~1,980) and the bottom of the Ichimoku cloud (~1,950).
Economic Reports for the week of December 18 – December 22
After last week’s messaging from the Fed acting as a booster for many futures markets, this week might seem a bit more subdued. Monday is relatively light with the Housing Market Index arriving at 10 AM, forecast to increase slightly to 36 from last month’s 34 print.
More housing information comes on Tuesday morning (Housing Starts and Building Permits), Wednesday morning (Existing Home Sales), and Friday morning (New Home Sales). Third Quarter GDP on Thursday is a final report and is expected to remain at the 5.2% number reported in the first revision.
Jobless Claims is released at the same time, and both reports can give us early clues as to whether the vision that Chair Powell laid out last Wednesday is in line with the data. As the quiet period for Fed speakers is over, expect more than just Raphael Bostic’s scheduled speaking engagement on Tuesday from Fed speakers.
|Monday, December 18
|10:00 AM ET: Housing Market Index
11:00 AM ET: Export Inspections
|Tuesday, December 19
|8:30 AM ET: Housing Starts and Permits
12:30 PM ET: Atlanta Federal Reserve Bank President Raphael Bostic Speech
4:00 PM ET: Treasury International Capital
4:30 PM ET: API Weekly Oil Stocks
|Wednesday, December 20
|7:00 AM ET: MBA Mortgage Applications
7:00 AM ET: Bank Reserve Settlement
8:30 AM ET: Current Account
10:00 AM ET: Existing Home Sales
10:00 AM ET: Consumer Confidence
10:30 AM ET: EIA Petroleum Status Report *
|Thursday, December 21
|8:30 AM ET: Jobless Claims ***
8:30 AM ET: Export Sales
8:30 AM ET: GDP ***
8:30 AM ET: Corporate Profits
8:30 AM ET: Philadelphia Fed Manufacturing Index
10:00 AM ET: Leading Indicators
10:30 AM ET: EIA Natural Gas Report *
11:00 AM ET: Kansas City Fed Manufacturing Index
4:30 PM ET: Fed Balance Sheet
|Friday, December 22
|8:30 AM ET: Personal Income and Outlays *
8:30 AM ET: Durable Goods Orders
10:00 AM ET: Consumer Sentiment *
10:00 AM ET: New Home Sales
1:00 PM ET: Baker Hughes Rig Count
3:00 PM ET: Cold Storage
3:00 PM ET: Cattle On Feed
3:00 PM ET: Hogs & Pigs
*** Market Moving Indicators
* Merit Extra Attention
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