S&P/NQ Pull Back Ahead of NVDA’s Big Week

E-mini S&P (December) / E-mini NQ (December)

S&P, last week’s close: Settled at 6755.25, down 4.75 on Friday and up 1.50 on the week

NQ, last week’s close: Settled at 25,094.00, down 0.75 on Friday and 72.25 on the week

E-mini S&P and E-mini NQ futures pared early losses Friday to turn positive but struggled to hold higher ground. Price action was again firm overnight, trading above Friday’s high, before each index slipped about 1%, set new session lows, and turned negative at the onset of U.S. hours. GOOG is a leader to start the week after news that Berkshire bought a $4.9 billion stake, in a rare tech bet that gets some of the company’s cash hoard to work. The positive sentiment shift, tied to the famed investor (Buffett), helped justify last night’s early strength.

The week will build up into NVDA’s much-anticipated earnings report after the bell on Wednesday. Also, HD is due on Tuesday and WMT Thursday, both ahead of the bell. The Minutes from the October Fed meeting will be released on Wednesday, and traders should keep an ear out for Fed speak as the week unfolds. The September Nonfarm Payroll report is due on Thursday morning, as economic data plays catch-up from the government shutdown. NY Empire State Manufacturing for November came in better than expected this morning at 18.70 versus 6.10, the highest since 31.20 last November.

E-mini S&P futures tested resistance at 6795 on Friday and briefly traded above it overnight; this will define the top end of the range to start the week, and we must close above here to invite fresh buying. Similarly, the E-mini NQ briefly traded above Friday’s high of 25,295. Both indices have additional resistance above there at 6806-6812.50 and 25,370-25,386. Given the weakness ahead of the bell, price action may need to build out support, holding the levels we have defined below. With that said, Friday’s reversal from the opening bell low looks tremendous on the chart, retesting the prior Friday’s low and leaving a large tail. We would expect to see a firm tape if price action can hold above our Pivot and point of balance at..