Today’s sample of Futures Analysis from

U.S. equity markets rallied late in the session to close above key retracement points as traders set aside their recent worries and returned from the sidelines. The markets opened firm then surged to the upside following a better than expected U.S. manufacturing report. Good news from the consumer side also helped to support the rally.

The March E-mini S&P 500 found support at a .618 retracement price at 1069.50 early Monday morning, but it is the close over the 50% price at 1084.50 which should trigger further upside movement. The charts indicate a rally to 1107.00 is likely over the near-term.

Greater demand for risk is helped to pressure Treasury futures. Fear had been driving investors into the safety of the March Treasury Bonds and March Treasury Notes. Better than expected U.S. economic reports also contributed to the weakness. These reports are signs that the U.S. economy is improving moves the Fed closer to hiking interest rates which is bearish for Treasury prices. The bigger picture still indicates that March Bonds are finding resistance inside a major retracement zone at 118’24 to 119’24. A close under 118’24 will indicate weakness that could trigger the start of a break back to 116’06.

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