Daily Game Plan from Cabrera Capital

Tuesday, December 18, 2018                                                         Trading Desk: (312) 236-8907

 

TODAY’S GAME PLAN:  

DATA/HEADLINES:   12:40ET  Fed’s Evans speaks

U.S. economic data calendar empty for Wednesday.  Today is a key day for the process in the impeachment of U.S. President Trump.  Policy decisions are due Thursday from the Bank of Japan and the Bank of England. Chicago Fed President Charles Evans speaking to the Economic Club of Indiana at 12:40pm.

China will not re-route imports from US that currently passes through Hong Kong to Chinese mainland ports, as that will undercut Hong Kong’s standing in the global trade system without solving China-US trade problems – Global Times (link).

TODAY’S HIGHLIGHTS: 

EQUITIES:   pre market movers at bottom of this page

E-mini S&P is +0.05%,  Nasdaq +0.07%, RTY +0.15%, Dow future +0.07%. ES has initial key support at 3187. SPX is gaining some upside momentum above the 3155 Fibonacci extension level.

Small caps outperformed yesterday and we will look for IWM to remain positive short term above 163.20 area

Bank sector outperformed yesterday with KBE up 0.95%.  KBE vs SPY is positive as it holds above the 200dma in the pair.

FedEx Corp. plunged after cutting its profit forecast for the second straight quarter, as weak international demand hurt sales. FDX is down more than 7% this morning after again failing to gain a settle above its 200dma. Short term .618 retracement support is at 149.47*

Czech central bankers will likely keep the benchmark interest rate unchanged at 2%.  Traders will be watching a batch of Russian economic data including unemployment and retail sales figures. Argentina is also set to publish its jobless rate as Colombia releases a trade print. March EM future is up 0.4% and over 7% from the early December low when it held the 200dma.

The Stoxx Europe 600 Index rose as most national benchmarks in the region traded in the green, though Germany’s gauge bucked the trend even as data showed business expectations improved for a third month.  The EU warned the U.K. that Prime Minister Johnson’s plan to stick to a 2020 Brexit transition period revives the risk of the country’s ties to the bloc being severed disruptively. EuroStoxx 600 is flat ahead of the US market open.  DAX future is lower by 0.35%.

Asian stocks drifted near an 18-month high, as investor weighed strong U.S. factory data against rising concerns about a hard Brexit.  Markets in the region were mixed, with Thailand up and Japan down. Energy producers led gains while industrial companies retreated.  Japanese exports dropped for a 12th straight month, but analysts said the slightly-better-than-expected figures suggest the slump may be bottoming.  The Shanghai Composite Index slipped -0.22% as it continues to find resistance around the late April gap.

FIXED INCOME:  

Treasuries maintain narrow Asia-early European range with the long-end outperforming and unwinding a portion of Tuesday’s steepening move on the curve. Greek notes rally after a report that the ECB‘s Single Supervisory Mechanism may lift the regulatory ceiling on domestic banks’ holdings of Greece’s debt.

10 year future is holding within its 50dma and 200 day moving average.  30 year held its 200dma late last week.

METALS: 

Gold fluctuated, trading in a narrow range.

February Gold future is slightly higher, holding a short term trend line (and below its 100dma). Silver/Gold spread is also holding/hovering around a s/t trend line resistance.

ENERGY:

Oil retreated from a three-month high after the API report showed a large build in U.S. crude and gasoline stockpiles, reviving concerns over renewed oversupply. Official government figures are due today. Natural gas prices extended declines as forecasts for milder U.S. weather call into question whether enough heating demand will arise to drain inventories. Futures lost as much as 1.3% after falling 0.9% yesterday.

Feb WTI tested the .786* retracement of the year and potential reversal area. If we do get a pullback from here, look for WTI to lead Brent lower once the 200dma is broken in the spread.

CURRENCIES:

The pound extended its losses after tumbling Tuesday on renewed concern that a no-deal Brexit is possible, though it trimmed Wednesday’s decline when U.K. inflation came in steady. Dollar Spot Index held its Tuesday gains as a lack of fresh catalysts took volatility in the yen down to a record low.

EURUSD is lower today after several days attempting to get a settle above its 200dma.  USDJPY has bullish Golden Cross potential

TECHNICAL LEVELS:  (futures)

ESH TYH Feb Gold CLG DXH
Resistance 3258.50 130’24* 1526.4 *66.52* 99.000
3250.00 130’03* 1520.4* 65.00 98.735
3230.00 129’16+ 1500.0 63.87 97.275
3213/14 129’09 1495.7 63.16 97.825
3203.50 128’23-26 1487.5 60.95 97.265
Settlement 3199.00 128’14+ 1480.6 60.87 96.580
3187.00 128’11 1476.9 59.85 96.215
3176.00 *127’30* 1461.3 59.15 95.365
3160/61 127’12/14 1450/52* 58.65* 95.100
3153.00* 127’00 1426.5 58.00 94.050
Support 3136/37 126’22* 1420/21 57.00-25* 93.500

Colors within the report: Green is always the 200 period (day, week). Red is always 21, Blue = 50, Brown = 100  *Stars have more emphasis, meaning 2 or more technical pts line up; cl = closing key

Equity movers in early trading, as of 7:35am EST:

Advancers

  • SLDB +19.8% (+$0.95); Solid Biosciences Shares Drop on SGT-001 Development Update
  • SYRS +17.7% (+$0.82); Syros Pharma to Get $20 Million in Global Blood Partnership
  • PCG +12.8% (+$1.40); PG&E Wildfire Damage Trial Will Be Averted if Settlement Sticks
  • OBSV +5.2% (+$0.15)
  • PTI +3.2% (+$0.05)
  • GIS +2.7% (+$1.43); General Mills Second Quarter Adjusted EPS Beats Highest Estimate
  • ASLN +14.6% (+$0.34)
  • SSL +8.3% (+$1.72)
  • SBGL +2.3% (+$0.22)
  • CLLS +2.1% (+$0.38)
  • GFI +2.1% (+$0.12)

Indicated Higher

  • COLM $97.81-$99.99 vs $94.40 close; Columbia Sportswear to Join S&P Midcap 400; Uniti SmallCap 600
  • RIBT $1.52-$1.55 vs $1.49 close
  • UNIT $7.75-$7.89 vs $7.59 close; Columbia Sportswear to Join S&P Midcap 400; Uniti SmallCap 600
  • CLSD $2.25-$2.40 vs $2.16 close
  • CYAD $10.13-$10.69 vs $9.85 close

Decliners

  • ADRO -11.3% (-$0.13); Aduro Bio Cut to Market Perform at William Blair
  • FDX -7.6% (-$12.4); FedEx Earnings Results ‘Breathtakingly Bad,’ Deutsche Bank Says
  • PACB -6.5% (-$0.35); U.S. Moves to Block DNA-Sequencing Deal on Competition Fears (1)
  • NK -4.2% (-$0.16)
  • SRNE -3.7% (-$0.15)
  • AMC -2.8% (-$0.23); AMC Entertainment Cut as BofA Sees Weak Slate of 2020 Films
  • IFRX -2.4% (-$0.1)
  • ASRT -2.3% (-$0.03)
  • GMAB -2% (-$0.45)
  • TIGR -2% (-$0.07)
  • DBVT -2.2% (-$0.2)
  • STM -2.4% (-$0.66)