Market Analysis - 02.04.2020
OVERALL MARKET
Futures are mostly up in the overnight session due to stronger economic numbers. Big names reporting today are $BP, $CMG, $COP, $DIS, $F, $SNAP and $SNE.
CRUDE OIL
While $CL saw some downward momentum into the beginning of the overnight session, it has since risen back into yesterday's value area. With an opening range within previous day's value, it's difficult to predict a conviction and direction of the market at this time. Sentiment remains consistent with yesterday, with a slightly more optimistic outlook due to stronger economic numbers. Keep an eye out for range extensions to the upside above 51.07 or to the downside below 50.32 in order to determine if buyers or sellers are in control. GEX levels have contracted, with the range narrowing to 50-5e per contract through the next ten days.
Short term and long term momentum is still to the downside. Current high volume node centered around 50.49. The upper limits of the node reach 50.91 while the lower area drops to 50.39. If we break below this level, downside target of the next HVN at 50 then 49.66 (overnight low) the most likely next level of support. If we move above resistance, look to 51.07 and then 51.29 as the next two levels of resistance.
S&P 500
$ES opened within yesterday's value area but has since extended to the upside. Due to positive economic news and fear of the #coronavirus dying down, look for upward potential today. $ES GEX levels show the market anticipating the contracts to narrow between 3250-3300 in the next 45 days. As of this writing, $ES currently at 3283.
Earnings season and the #coronavirus are the two main catalysts for #SP500 over the next few weeks. While short term momentum has turned negative, we are still seeing positive momentum in the long term outlook. Current high volume node centered around 3280 with the upper end at 3283.50 and the lower at 3277.25. If we drop below this area, look for support at 3266.25 and then 3258. If we push above the node, next resistance level would be 3300 and then 3322.
OUTLOOK
Expect upward movement in both $CL and $ES as stronger economic data and #coronavirus fear abates. $ES and $CL buyers are currently in control, and we will continue to watch and see if this causes a trend day in both markets.
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.