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Market Analysis - 04.22.2020

We provide key support and resistance levels for the following futures products daily:

Crude Oil (/CL)

S&P 500 (/ES)

NASDAQ (/NQ)

Natural Gas (/NG)

Euro (/6E)

British Pound (/6B)

 

CRUDE OIL


Key Support Levels:

6.73

10 - GEX


Key Resistance Levels:

11.79

12.50 - GEX

15.37

19.35

21.01


Auction Profile:

Down auction


/CL futures are trading in a narrow range towards the lower section of the previous value area. This looks to be consolidation before another down move. Downside risk and volatility in the contract remain elevated. EIA inventories are at 10:30 AM ET and are likely to momentarily increase volatility beyond what exists already in the market.


As we mentioned on Twitter yesterday, we wouldn't be surprised if this contract ends up in negative territory sometime before it expires next month. The CME group is already prepared by introducing negative strike options today. This has never been done before and the group had to change their option pricing methodology to account for negative prices. This will most likely be a self-fulfilling prophecy that causes oil prices to plunge further.

 

S&P 500


Key Support Levels:

2699.75

2750 - GEX

2750.25


Key Resistance Levels:

2800 - GEX

2810.50

2846.75

2883.50


Auction Profile:

Range bound


/ES futures are trading slightly above the previous value area currently. While this indicates buyers entering the market, strong resistance exists at 2810.50 and overall trend is negative. Downside risk remains elevated today.

 

NATURAL GAS


Key Support Levels:

1.75 - GEX

1.564

1.613

1.697


Key Resistance Levels:

1.719

2.00 - GEX

1.757

1.81

1.831

1.86


Auction Profile:

Down auction


/NG futures are trading far below the previous value area indicating strong selling pressure following rejection at 1.971. Due to this increase in selling and strong resistance areas located above current price, downside risk is elevated.

 

NASDAQ


Key Support Levels:

8300 - GEX

8374.50

8621.50


Key Resistance Levels:

8650 - GEX

8841.50

8963


Auction Profile:

Range bound


/NQ futures are trading inside the previous value area indicating little conviction from buyers or sellers. As strong support remains around 8374.5, upside risk is slightly elevated today.

 

EURO


Key Support Levels:

1.08081

1.08319

1.085 - GEX

1.08726


Key Resistance Levels:

1.09113

1.09425

1.10041

1.10482

1.11 - GEX


Auction Profile:

Range bound


/6E futures are trading above the previous value area today, illustrating a slight increase in buying pressure. These contracts are likely to remain range bound again today, with the likely range between 1.08319 to 1.09113.

 

BRITISH POUND


Key Support Levels:

1.2132

1.22 - GEX

1.222


Key Resistance Levels:

1.2293

1.2361

1.2472

1.2544

1.264

1.27 - GEX


Auction Profile:

Down auction


/6B futures are trading slightly above the previous value area indicating buyers have entered the market in some force. Couple this with strong support above 1.2222 and upside risk is elevated today.

 

FINAL THOUGHTS


/VX futures remain above 40 today indicating volatility is once again elevated. Gamma has fallen yesterday, but is still slightly positive indicating less volatility in /ES price action. DIX rose yesterday, showing institutions slowly increasing their buying. We continue to recommend keeping smaller contract size and using tighter stops.

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