Market Analysis - 01.30.2020
OVERALL MARKET
Resurgent fears of the #coronavirus have sent most futures downward during the overnight session as the disease spreads to more Asian countries and threatens China's economy. WHO is organizing today to consider issuing a global health emergency. The #FOMC meeting yesterday left rates unchanged with a small chance of a rate cut in the future. $TSLA and $MSFT provided earnings beats last night.
CRUDE OIL
$CL GEX levels have dropped, with the market pricing oil futures to stay between 50-55 per contract through the next two weeks, with multiple pockets of gamma exposure in between.
Key SR Levels:
Short term and long term trends continue to point to lower prices in $CL, especially after earnings misses in some big oil names. Current resistance at 52.50 and support at 52. If we break below this level, downward target of at least 51.50 with a possibility of reaching 51. If we head above resistance, look to 52.79 with a possibility of hitting 53.02.
S&P 500
$ES GEX levels show the market anticipating the contracts to remain between 3250-3260 through the end of the month. As of this writing, $ES currently at 3247.
The #coronavirus situation is continuing to add pressure to major indices globally. Current resistance at 3254.25 and support around 3241.75. If we drop below this area, look for support at 3225. If we push above the node, next resistance level would be 3265.
OUTLOOK
With the markets panicked by the continued spread of 2019-nCoV across Asia. Expect volatility with strong downward pressure. Stick to tested resistance levels, wait for price confirmation and use option volume to confirm your convictions.
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.