E-minis Rip Higher on Reversal, Bulls Target Next Resistance
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E-mini S&P (June) / E-mini NQ (June)
S&P, yesterday’s close: Settled at 6922.75, up 67.50
NQ, yesterday’s close: Settled at 25,543.50, up 262.25
E-mini S&P and E-mini NQ futures reversed sharply on Monday, resulting in a magnificent outside bullish day. Although price action was slammed Sunday night on U.S.-Iran negotiations ending without a deal. The impasse was in nuclear negotiations, but it became known that Iran was willing not to enrich uranium for five years, and Washington demanded 20 years. Reports of a potential compromise and continued talks before the two-week ceasefire expires brought a bullish tailwind from the morning and carried through the closing bell.
Short covering certainly had an impact on yesterday’s price action, and CTAs, who, as a group, were believed to have taken a short position two weeks ago, were triggered to cover. Also, software and the most beaten-down names led yesterday: ORCL, NOW, CRWD, MSFT. Still, the rally was broad, with risk-on as banks and asset managers such as BX did well, while staples, utilities, and telecom struggled.
Today’s PPI report for March came in significantly lower than expected. Producer prices are a leading indicator of consumer prices, and although the data itself was hot with headline at 4.0% y/y and Core at 3.8%, expectations were 4.6% and 4.2%. Furthermore, Core m/m data was very muted at +0.1% versus +0.4% expected, and headline was +0.5% versus 1.1%.
E-mini NQ futures are testing the post-NVDA earnings report reversal from February 25th and resistance aligning with such at 25,681-25,726. E-mini S&P futures face resistance aligning with the gap close from the day after NVDA’s report at 6972.75. The damage left in this aftermath creates key resistance ahead, detailed below. With that said, the strength from yesterday’s reversal cannot be ignored, and a path higher is paved with continued price action above support aligning with yesterday’s settlement, and our Pivot and point of balance at….
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