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Market Analysis - 01.27.2020

Updated: Jan 28, 2020

Good evening,


I am going to start posting a new market analysis daily starting tonight. It will consist of my thoughts on the state and general direction of the markets. I will focus mainly on crude oil ($CL) and S&P futures ($ES) as these are my favorite contracts to trade, due to their incredible liquidity and volatility. Please feel free to reach out with comments or questions here, on Twitter or at support@FuturesTrad3r.com.

 

OVERALL MARKET


$CL , $ES, $NQ, $RTY and $YM all took a nosedive at the open on Sunday night. Increased reported infections of the coronavirus coupled with political uncertainty in the US are having negative effects in the index and oil markets.


 

CRUDE OIL


Looking at $CL GEX levels, the market is pricing oil futures to stay between $50-55 per contract through March.

Oil has only been lower than $52 for seven days out of the past six months and 16 days in the past 12 months. This indicates that $51.50-52 is a very strong support level to keep an eye on. However, if the coronavirus infections continue to rise at an alarming rate, this support level will not be sustained. $53.70-53.90 is the next short term resistance level. If broken, expect a move to around $54.10-54.30 before a major rejection.

 

S&P 500


$ES GEX levels show the market anticipating the contracts to remain between $3250-3270 through the end of the month.

Short term support level around $3250. If the $3270 level is broken, look to $3275-3285 to act as strong resistance. If the $3250 level is penetrated, look to $3230-3240 to act as strong support.

 

OUTLOOK


With all of the negative news out there, downward bias is highly implied across index and oil futures. Looking to #STFP (Sell The F**n Peak) around strong resistance levels. This could easily change if positive news surrounding the coronavirus comes out, but all signs point to this being very unlikely. Also, there's a FOMC meeting coming up this week that will more than likely cause some market volatility.


As always, stay on your toes and watch for any news catalysts that could cause a change in bias. Control your emotions so they don't control you.

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