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Now is a Good Time to Move to the Sidelines During the Midterm Elections

by Archer Financial Services | Nov 06, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

The Labor Department's 9:00 central time September Job Openings and Labor Turnover Survey (JOLTS) is expected to total 7.11 million. The JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits.

It is a good idea stand aside during this very uncertain election period since it is very likely that volatility will be extreme.

Regardless of the election results, however, it will be the still relatively low interest rate environment that will provide long term underling support for stock index futures.

 

CURRENCY FUTURES

The U.S. dollar is lower and the euro currency is higher after a report showed the euro zone Services PMI came in slightly better than expected in October.

IHS Markit revised higher its services PMI for the euro zone to 53.7 from a flash estimate of 53.3. The revision comes in spite of a sharp drop in Italy's services PMI, but followed by better than expected German data. 

Building permits in Canada increased .4% in September from August. 

The Reserve Bank of Australia left interest rates unchanged at its policy meeting today, indicating it continues to wait for signs of an increase in wages and inflation.

The RBA left the cash rate target at 1.5% where it has remained for over two years.

The Australian dollar firmed when the RBA offered a more bullish outlook for Australia's economy with its GDP forecasts revised higher.

 

INTEREST RATE MARKET FUTURES

The Treasury will auction 10 year notes today.

The Federal Open Market Committee will hold its regularly scheduled policy meeting on Wednesday and Thursday. The probability of a fed funds rate hike at that meeting is 6%.

According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committee’s December 19 policy meeting is 77%, which is unchanged from yesterday.

 

SUPPORT AND RESISTANCE

December 18   S&P 500

Support    2725.00      Resistance    2749.00

 

December 18   U.S. Dollar Index

Support    99.850        Resistance    96.370

 

December 18   Euro Currency

Support    1.14160      Resistance    1.14860

 

December 18   Japanese Yen

Support    .88370        Resistance    .88770

 

December 18   Canadian Dollar

Support    .76150        Resistance    .76430

 

December 18   Australian Dollar

Support    .7202          Resistance    .7255

 

December 18   Thirty Year Treasury Bonds

Support    137^4         Resistance    137^28

 

December 18   Gold

Support    1226.0        Resistance    1241.0

 

December 18   Copper

Support    2.7350        Resistance    2.7800

 

December 18   Crude Oil

Support    62.37          Resistance    63.55


For more information about these markets, please contact Alan at 312.242.7911  or via email at alan.bush@admis.com. Thank you.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff.  Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.

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