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Market Analysis - 01.31.2020

OVERALL MARKET


Futures are mostly down overnight as poor European economic data drives the declines. Earnings season continues with $AMZN reporting stellar numbers last night and $XOM and $CVX due to report today before the opening bell.


 

CRUDE OIL


While $CL saw some momentum into the beginning of the overnight session, it has since fallen back into yesterday's value area. Depending on the morning's price action, we could see #CrudeOil stay within this value area as buyers and sellers seem more or less agreed to fairest value for the moment. GEX levels have continued to drop, with the market pricing oil futures to stay between 50-55 per contract through the next two weeks.

Key SR Levels:

Short term and long term momentum is still to the downside. Favorable earnings reports from Exxon Mobil and Chevron could add a boost to prices. Both look to report prior to regular trading hours today. Current high volume node centered around yesterday's POC at 52.31. The upper limits of the node reach 52.56 while the lower area drops to 52.25. If we break below this level, downside target of the next HVN at 52.15 then 51.85 the most likely next level of support. If we move above resistance, look to 52.66 and then 52.83 as the next two levels of resistance.

 

S&P 500


$ES GEX levels show the market anticipating the contracts to remain between 3250-3300 through the end of the day. As of this writing, $ES currently at 3271.

Weaker than expected European growth is currently weighing on indices across the globe. Look for earnings reports to continue to impact the #SP500 for next few weeks. While short term momentum has turned negative, we are still seeing positive momentum in the long term outlook. The return of $ES to its previous day's VAH show market sentiment is consistent with the earlier parts of yesterday. However, as of now the VAH hasn't been breached, which could signal that today's price range between 3266 - 3296 could hold for the remainder of the day. We'll have to wait and see if buyers or sellers take control after the opening bell. Current resistance at 3276 and support around 3269.50. If we drop below this area, look for support at 3265 and then 3257. If we push above the node, next resistance level would be 3280 and then 3289.

 

OUTLOOK


Expect a continued increase in volatility with the #coronavirus and earnings the main catalysts to keep an eye on. With both $ES and $CL nearing previous day's value areas, look for any range extensions to the upside, with a balanced day more likely for $CL while $ES has more upside potential.


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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