E-mini S&P (December) / E-mini NQ (December)
S&P, last week’s close: Settled at 6830.75, down 76.50
NQ, last week’s close: Settled at 25,213.50, down 500.00
Friday was a tough day for tech. The E-mini NQ lost 1.9%, led by a sharp drop in AVGO after reporting earnings Thursday night. The stock lost 11.4% as the CEO deflected the momentum around custom chip design, and non-AI semiconductor forecasts underwhelmed. Things deteriorated further amid rumors that ORCL is delaying its OpenAI data center build from 2027 to 2028. The stock finished down 4.5%, but 2% off its worst level after the company denied the reports and said all project goals remain on schedule. Still, the tech trade has been unenthusiastic since the start of December, dragging both the E-mini S&P and E-mini NQ. However, the E-mini Dow, Russell 2000, and RSP (the equal weight S&P), all finished at weekly closing highs, despite a broad reversal from the Friday morning highs.
A slate of data from China that included Industrial Production came in light last night. NY Empire State Manufacturing, fresh for December, whiffed this morning at -3.90 versus 10.00 expected. NY Fed President Williams speaks at 9:30 am CT and will be closely watched. Micron reports earnings after the bell today.
This is witching week, and we do not switch to the new month (March) until Tuesday’s session. E-mini S&P and E-mini NQ futures held the mid-morning low through Friday’s close and the Sunday night reopen. Buyers have stepped in overnight, helping to pare the worst of Friday’s losses. Friday’s low in the E-min NQ, the weakest index, was the .382 retracement back to the November 21st low. We believe that when markets are in uptrends, they hold a pullback to the .382, and vice versa in downtrends. We will look for leadership to emerge and keep a bid under the tape this morning. The December E-mini S&P has major three-star support that was a sticky area last week, coming in at 6834.25-6838; the bulls must defend this area or risk a deterioration like Friday. In order to neutralize Friday’s weakness, price action must clear major three-star resistance at….
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