Futures Trading Outlook: YM Futures Volatility Ahead?

In this week’s coverage, we analyze potential YM futures volatility, the new high in the Micro Nasdaq 100 Index futures, the stall in RBOB gasoline futures, and the break downs in British pound and gold futures. We also examine the economic reports and earnings announcements expected next week.

Please Note:
Commentary and charts reflect data at the time of writing. Market conditions are subject to change and may not reflect all market activity.

March Micro Nasdaq 100 Index Futures Weekly Chart

March Micro Nasdaq 100 Index futures made a new high last week but finished the week down almost undoing the previous week’s gains. This market is still in bull mode as it’s well above the 52-week and the 200-week moving averages and the Ichimoku cloud. The MACD continues to show signs of bullishness, though the RSI is showing cracks in the bull trend. The RSI closed below the overbought level of 70, which could be seen as a bearish signal. It also shows signs of divergence as the peak highs in RSI are declining while the peak highs in price are increasing. Should the rally resume, look for possible resistance at the 100% Fibonacci extension level of 19,358. A downtrend might find support at the 23.6% Fibonacci retracement level (17,230) and further down at the 38.2% Fib retracement level (16,852).

March RBOB Gasoline Futures Weekly Chart

March RBOB gasoline futures were neutral last week, though it managed to stay above the Ichimoku cloud and the 52-week moving average, while testing the recent high from October last year. Following the MACD crossing its signal line 2 weeks ago, the MACD line is about to turn positive, which could be a further bullish indication from that momentum indicator. The RSI is trading in line with price, showing a little bit of bullishness since early December last year. Both indicators reflect the consolidating trend in price that began in September 2022. Significant resistance levels include the downward sloping trend line that began in June 2022 (~2.5070), the recent high from September 2023 (2.6916), and an even higher high from June 2022 (3.1820). Possible support includes the bottom of the Ichimoku cloud (~2.2700) and the supportive trend line that began in May of 2023 (1.7217).

March British Pound Futures Weekly Chart

March British pound futures finish the week down, finding support at the 52-week moving average and remaining in the Ichimoku cloud. The pound also tested support found by joining the lows from September 2022 to October last year. The MACD line is poised to cross below its signal line, indicating a bearish price trend. The RSI is trending down with price, and at 51, has plenty of room to go to get oversold. If the pound rallies out of the Ichimoku cloud, look for resistance at the 200-week moving average (~1.2940) and at the recent high of 1.3157. If the pound breaks below the support levels it’s encountering right now, look for support at the 38.2% Fibonacci retracement level (1.2134) and at the recent low of 1.2051.

April Gold Futures Weekly Chart

While April gold futures looked like it may have closed below two moving averages last week as buyers came in to keep this market between the 52-week and the 200-week moving average. The Ichimoku cloud has been acting as support for gold for the last two months, although last week’s close below the top of the cloud could indicate further bearishness. The MACD line crossed below its signal line, indicating a bearish move. RSI is trending down, and at just below 50, is trending along with price. If this market continues to weaken, support might be found at the 200-week moving average (~2008), the 61.8% Fibonacci retracement level (~1,981) and the bottom of the Ichimoku cloud (~1,973). A rally could encounter resistance at the 38.2% Fibonacci level (2,053.5) and the 23.6% Fib level (2,098.5).

Companies Reporting Earnings February 19 — February 23

This week looks to be light on major earnings reports due to the holiday on Monday and the transition from U.S. companies to Canadian companies reporting for this earning season. Tuesday morning sees two Dow Jones companies, Walmart and Home Depot, which could shed some light on the retail aspect of the economy. This could result in volatility for YM futures. All eyes are on NVIDIA Corp Wednesday afternoon, as Nasdaq futures might see the most volatility, though what happens in tech certainly extends to the S&P 500 and to the Dow. Energy companies Sinclair and Suncor report Wednesday, as well. Other notable names reporting this week are HSBC, Moderna, Wayfair and Warner Brothers.

Date | Companies Earnings

Monday, February 19

Markets Closed–Presidents Day

Tuesday, February 20

Walmart Inc. (WMT): $1.64 EPS Estimate, $170.21B Revenue Estimate (BMO) *
Home Depot, Inc. (HD): $2.76 EPS Estimate, $34.63B Revenue Estimate (BMO) *

Wednesday, February 21

HSBC Holdings plc (HSBC): $0.90 EPS Estimate, $67.05B Revenue Estimate (BMO)
HF Sinclair Corporation (DINO): $0.67 EPS Estimate, $7.71B Revenue Estimate (BMO)
NVIDIA Corp. (NVDA): $4.52 EPS Estimate, $20.24B Revenue Estimate (AMC)
Suncor Energy, Inc. (SU): $0.74 EPS Estimate, $7.21B Revenue Estimate (AMC)

Thursday, February 22

Moderna, Inc. (MRNA): $-0.82 EPS Estimate, $2.50B Revenue Estimate (BMO)
Wayfair Inc. (W): $-1.53 EPS Estimate, $3.12B Revenue Estimate (BMO)

Friday, February 23

Warner Brothers Discovery (WBD): $-0.03 EPS Estimate, $10.37B Revenue Estimate (BMO)

* indicates that this company is in the Dow Jones Index

Economic Reports For The Week Of February 19 — February 23

With Presidents Day arriving on Monday, our first impactful report could be the Conference Board’s Leading Indicators report arriving 10 AM Tuesday morning. Analysts are forecasting a decline of 0.3%, down from last month’s decline of 0.1%.

The FOMC releases the minutes of the last meeting at 2 PM Wednesday. The FOMC minutes have become an important way to determine what the Fed might be thinking for the next meeting’s rate decision, and as such, can be a market mover.

Jobless Claims on Thursday morning are expected to tick up from 212K to 217K. Later that morning, PMI Composite Flash, which includes services and manufacturing, could be a market mover as well. Both numbers are expected to decline slightly from last month’s numbers.

The EIA releases the Natural Gas Storage report at its usual time on Thursday at 10:30 AM and follows with a one day-delayed Crude Oil Inventory report at 11 AM. Fed speakers this week, include: Raphael Bostic on Wednesday morning, and Patrick Harker and Neil Kashkari on Thursday afternoon. We finish the week with reports specific to the agriculture and energy markets.

Date | Economic Reports

Monday, February 19

Markets Closed–Presidents Day

Tuesday, February 20

10:00 AM ET: E-Commerce Retail Sales
10:00 AM ET: Leading Indicators
11:00 AM ET: Export Inspections

Wednesday, February 21

7:00 AM ET: MBA Mortgage Applications
8:00 AM ET: Atlanta Federal Reserve Bank President Raphael Bostic Speaks
2:00 PM ET: FOMC Minutes ***
4:30 PM ET: API Weekly Oil Stocks

Thursday, February 22

8:30 AM ET: Jobless Claims ***
8:30 AM ET: Chicago Fed National Activity Index
9:45 AM ET: PMI Composite Flash *
10:00 AM ET: Existing Home Sales
10:00 AM ET: Quarterly Services Survey
10:30 AM ET: EIA Natural Gas Report
11:00 AM ET: EIA Petroleum Status Report
3:15 PM ET: Philadelphia Federal Reserve Bank President Patrick Harker Speaks
4:30 PM ET: Fed Balance Sheet
5:00 PM ET: Minneapolis Federal Reserve Bank President Neel Kashkari Speaks

Friday, February 23

8:30 AM ET: Export Sales
1:00 PM ET: Baker Hughes Rig Count
3:00 PM ET: Cold Storage
3:00 PM ET: Cattle On Feed

*** Market Moving Indicators
* Merit Extra Attention

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This article was originally published on NinjaTrader.com: https://ninjatrader.com/futures/blogs/futures-trading-outlook-ym-futures-volatility-ahead/