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Market Analysis - 01.29.2020

OVERALL MARKET


Major futures contracts are mostly up after the overnight session. News out of China regarding the #coronavirus starting to turn slightly positive. #FOMC meeting announcement is today at 2 PM EST and we are still in the midst of earnings season.

CRUDE OIL


Looking at $CL GEX levels, the market is continuing to price oil futures to stay between 52-55 per contract through March, with multiple pockets of gamma exposure in between.



Key SR Levels:

Short term and long term trend points to lower prices in $CL, however, the past two days have shown some upward momentum. Current high volume node centered around 54.16, with upper area reaching to 54.37 and lower area to 53.82. If we break below this node, downward target of at least 53.48 with a possibility of reaching 53.12. If we head north, look to 55 with a possibility of hitting 55.35.

S&P 500


$ES GEX levels show the market anticipating the contracts to remain between 3260-3300 through the end of the month.



The continued #coronavirus situation will continue to weigh on major indices like the S&P 500. Also, the slow removal of liquidity from the repo market by the Fed will dampen some of the risk-on accumulation we have been seeing over the past few weeks. Current high volume node is centered around 3283.50 with an upper area ending at 3300 and the lower area stopping around 3265.50. If we drop below this node, look for support at 3241.75. If we push above the node, next resistance level would be 3306.25.

OUTLOOK


Expect most of the markets to remain subdued with the FOMC announcement weighing on the minds of traders. It's EIA inventory day for $CL with the data dropping at 10:30 AM EST. These next few days will be key for both $ES and $CL to see if the #coronavirus scare was just a speed bump or a sign of things to come.


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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