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Historical Tendencies Bullish for Stock Index Futures after Midterms

by Archer Financial Services | Nov 07, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Stock index futures advanced after the U.S. elections divided control of Congress.

History has shown that U.S. equity markets after the midterm elections have a tendency to advance through year-end and into the next year. In addition, the third year of a presidential term is historically the strongest year for stock index futures.

The 2:00 central time September consumer credit report is expected to show a $16.5 billion increase.

In addition to the bullish historical tendencies for stock index futures after the midterm elections, there is the still relatively low interest rate environment that will provide long term underling support.

 

CURRENCY FUTURES

The U.S. dollar is lower and the euro currency is higher after the U.S. midterm elections cast doubt on further tax cuts.

The euro currency is higher in spite of news that the E.U. government's council of economic experts lowered their growth outlook due to greater global risks.

The currency of the euro zone is higher even though September retail sales in the euro zone were unchanged when an increase of .1% was predicted.

The British pound is higher despite a report that showed U.K. house prices increased at the slowest annual pace in five years.

 

INTEREST RATE MARKET FUTURES

The Treasury will auction 30 year bonds today.

Today is the first day of the two-day Federal Open Market Committee meeting. The probability of a fed funds rate hike at the conclusion tomorrow is 7%.

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 80%, which compares to 77% yesterday.

 

SUPPORT AND RESISTANCE

December 18   S&P 500

Support    2742.00      Resistance    2790.00

 

December 18   U.S. Dollar Index

Support    95.410        Resistance    96.370

 

December 18   Euro Currency

Support    1.14250      Resistance    1.15590

 

December 18   Japanese Yen

Support    .88030        Resistance    .88850

 

December 18   Canadian Dollar

Support    .76010        Resistance    .76760

 

December 18   Australian Dollar

Support    .7207          Resistance    .7314

 

December 18   Thirty Year Treasury Bonds

Support    136^20       Resistance    138^6

 

December 18   Gold

Support    1222.0        Resistance    1241.0

 

December 18   Copper

Support    2.7250        Resistance    2.7800

 

December 18   Crude Oil

Support    61.46          Resistance    63.27


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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