Where Do We Go From Here?
SPU is trading up 5.30 at 1437.30 on good volume of nearly 2500 contracts. On the economic front, we have the Chicago Purchasing Managers Index at 9:00 CST. Ahead of this report, bonds are trading 5/32 lower. Meanwhile, European markets are steady.
In the SPU today, here’s what were looking for. Our first support zone is 1433 – 1429. If we hold above this zone, look for a test of the 1444-1446 level. On the way up, 1438 should provide some resistance. If we get above the crucial 1446 zone, 1451-1455 should be strong resistance.
On the downside, if we break through the 1433-1429 support, look for 1425 — if this fails we should test the 1415 level. Along the way, 1420.50-1417 will be support. On a larger note, 1450-1451 will be a swing area for settlement concerns.
As for the NDU, we are called to open 35 higher at 3540. We have support between 3520 and 3495. If this area holds, look for a run to 3600. If we trade to this level, 3570 will provide support on any retracements. If buyers become aggressive, we could rally towards the next resistance zone of 3640-3665. On the downside, below the 3520-3495 zone, we have a larger target that comes into play – 3380-3360.
Along the way 3470-3459 is support, followed by 3420-3415. This level is crucial for settlement concerns, below this we could be headed for a retest of 2900. On the whole, we expect some position squaring-type trading, which should lead to a semi-volatile trade. We would expect the market to maintain within 1 Standard Deviation for settlement purposes.