Cabrera Game Plan:

Monday, December 30, 2018                                                         Trading Desk: (312) 236-8907

 

TODAY’S GAME PLAN:  

DATA/HEADLINES:  

U.S. economic data calendar includes preliminary November wholesale inventories (8:30am EST), December MNI Chicago PMI (9:45am EST), November pending home sales (10am) and December Dallas Fed manufacturing (10:30am)

CHINA’S VICE PREMIER LIU HE TO VISIT WASHINGTON FOR PHASE ONE TRADE WAR DEAL SIGNING THIS WEEK – SCMP, CITING A SOURCE

TODAY’S HIGHLIGHTS:   

US stock-index futures traded near unchanged today ahead of the next-to-last session of a blockbuster year for equities.  Futures on the S&P 500 Index pared earlier gains, after a lackluster session Friday. 

EQUITIES:   pre market movers at bottom of this page

E-mini S&P is +0.08%, Nasdaq +0.03%, RTY +0.14%, Dow future +0.07%. NYSE Advance/Decline line at all-time highs.

14 day RSI (Relative Strength) is extended most since May.

Small caps underperforming the S&P 500 over the last two weeks as the 200dma in IWM/SPY hovers above as pivotal resistance (has not been above since September, 2018). 

S&P Bank Sector ETF (KBE) has potential reversal/resistance at 48.35 area. Banks underperforming this month

EM future has key Fibonacci resistance around 1147 area. Chile half day today; SANTIAGO STOCK EXCHANGE WILL BE OPEN FROM 7.30 TO 10.30EST

In Europe, the Stoxx 600 Index fell as much as 0.4%, after closing at a record level on Friday, with all industry groups but banks in the red amid very low volume. Basic resources and autos led the decline. The euro hit a four-month high against the dollar.  DAX futures are lower by 0.45% and has initial support at the 50dma; Eurostoxx future is down 0.37%.

Asian stocks were little changed ahead of the New Year holiday.  Markets in the region were mixed, as shares rose in China but dropped in Japan. Shanghai Composite Index jumped 1.2%, led by consumer services and basic materials stocks. Japan’s Topix index declined 0.7% on last trading day of the year as the yen strengthened ahead of a four-day break. Japan’s markets will be shut from Tuesday through Jan. 5 for holidays.  China’s official manufacturing PMI is due Tuesday.

FIXED INCOME:   

Government bonds fell across the board, with bund yields climbing to the highest level since July.  Treasuries bear steepen, following wider sell-off across European rates, more notably gilts underperform. 2s10s spread reached widest level of the year as 10-year yields topped 1.90%, with little in the way of headlines or other catalysts for fixed-income weakness.

10 year yield has key 200 day moving average at 2.00%.  March Bund future has short term extension target at 170.22 and longer term key Fibonacci support down at 168.58*. 

30 year yield has key 200dma at 2.47%* (has not been above it since December, 2018). 

Treasury 2s10s curve tops at 31.8bp, steepest since October 2018.

METALS: 

Gold’s end-of-year rally is gaining ground even as investors target risk assets including equities. Gold climbed for the fifth time in six sessions as the dollar fell again.

February Gold future is flirting with the short term .618* retracement resistance.  Silver has been leading higher this month and March Silver is positive short term above 17.81.

ENERGY

Oil traded near the highest close in over three months after U.S. crude stockpiles declined more than expected, easing oversupply concerns.  Oil is poised for the biggest yearly gain since 2016.

Feb WTI is led higher by March Brent, which is above the September key higher this morning.  

CURRENCIES:    

Major developed-country currencies strengthened against the dollar, as did a host of emerging market peers.  The euro gained for a fourth day as the dollar declined against all its Group-of-10 peers amid end-of-year rebalancing. Liquidity is thin ahead of the New Year holiday and trading is relatively muted. The pound advanced for a fifth session as investors looked to the lifting of Brexit uncertainty and fiscal stimulus from the new U.K. government.  GBP/USD rises as much as 0.4% as it heads for its best quarterly performance in a decade.

March US$ Index has fallen 1% after testing the 200dma resistance last week. 96.215 is short term key support in the future. EURUSD remains positive short term with settles above 1.1146* (200dma). EURJPY remains positive short term above its 200 day at 121.13.

AUDUSD is gaining some upside momentum after climbing above its 200dma for the first time since March, 2018.

TECHNICAL LEVELS:  (futures)  

 

ESH

TYH

Feb Gold

CLG

DXH

Resistance

3300.00

130’20

1580.0

*66.52*

99.000

 

3280.00

130’03*

1566.2

65.00

98.735

 

3262.50*

129’16+

1540.5

63.87

97.275

 

3254/55

129’09

1526.4

63.16

97.825

 

3247.00

128’23-26

1520.4*

62.00

97.500

Settlement

3237.50

128’21

1518.1

61.72

96.546

 

3234.50

128’07

1511.8

60.83

96.215

 

3222.00

*127’30*

1494.4

60.00

95.365

 

3215.00

127’23+*

1475.0

59.42*

95.100

 

3203/04

127’00

1462.3

57.68

94.050

Support

3184/85*

*126’22*

1446.2

56.50

93.500

Colors within the report: Green is always the 200 period (day, week). Red is always 21, Blue = 50, Brown = 100  *Stars have

Equity movers in early trading, as of 8:05am EST:

Advancers

  • SLGL +137.3% (+$12.7); Sol-Gel Tech Surges as Acne Drug Meets Phase 3 Goals
  • ACTG +21% (+$0.56)
  • SAVA +19% (+$0.99); Cassava Sciences Looks to Extend Friday’s 29% Gain
  • MAXR +17.2% (+$2.46); Maxar Plans to Sell MDA Unit to Consortium for $765 Million
  • WVE +11% (+$1.74); Wave Life Shares Volatile After Mixed Huntington’s Disease Data
  • DTSS +10.7% (+$0.33)
  • LCTX +10.4% (+$0.08)
  • BGG +10.3% (+$0.61)
  • FCEL +9.4% (+$0.12)
  • AXSM +8.4% (+$8.52); Axsome’s AXS-07 Meets Co-Primary, Key Secondary Endpoints
  • MYGN +8.3% (+$2.22); Myriad Genetics Rises After Winning FDA Approval For Test
  • MDR +7.4% (+$0.11)
  • SNDL +5.7% (+$0.13)
  • TANH +4.4% (+$0.08)
  • DRRX +4.3% (+$0.14)
  • OBSV +4.1% (+$0.15)
  • MTNB +3.5% (+$0.07)
  • MRNS +3.5% (+$0.08)
  • RRC +3.1% (+$0.14)
  • GTE +2.5% (+$0.03)
  • CHK +2.4% (+$0.02)
  • SPPI +2.3% (+$0.08)
  • CRWD +2.2% (+$1.06); CrowdStrike Named Top Security Pick at Needham on 2020 Potential
  • HL +2.1% (+$0.07)
  • WLL +2.1% (+$0.14)

Decliners

  • CFRX -10.3% (-$0.07)
  • MVIS -10.3% (-$0.08)
  • NLNK -6.1% (-$0.17)
  • WKHS -5.3% (-$0.17)
  • ITRM -5.3% (-$0.25)
  • ASRT -2.9% (-$0.04)
  • SDRL -2.7% (-$0.06)
  • AGRX -2.5% (-$0.06)
  • RAD -2.3% (-$0.47); Rite Aid Has Risen 7 Straight Days
  • PSTI -2.2% (-$0.09)