Note: today’s worksheet is based on the ES December 2019 contract. Volume remains higher on the ES September 2019 contract, but the shift to the December contract should be made sometime this morning.
Trump raised hopes slightly for a partial US/China trade deal in talking with reporters yesterday, “it’s something we would consider, I guess.” However, Trump qualified that no part of a trade deal is easier than other parts and that he would rather secure a full US/China trade agreement.
The ECB cut rates yesterday an aggressive 0.5% and said they will restart a quantitative easing program. US stock market index all-time highs are within reach for a test today if the bullish sentiment continues after 7 consecutive bullish days.
Broadcom (AVGO) is down over 1.5% this morning after beating expectations but expressed caution over future earnings. CEO Hock Tan told investors, “the US/China trade dispute is turning into an extended affair with lots of twists and turns in uncertainty… and we are assuming conditions (are) not going to change from what we’re seeing now. And if we make that assumption for next year, you probably see a very uncertain 2020.”
The economic calendar focus is Retail Sales @ 8:30am ET and UoM Consumer Sentiment @ 10:00am ET. Also, on the calendar are Import Prices @ 8:30am ET and Business Inventories @ 10:00am ET.
Volatility is shrinking as the ES tries to move higher. The ES 5-day ATR has dropped from the 30s down to 24.5. Sans a change in trader expectations, expect price movement to the upside to be muted. Size bias is long into the 8:30am ET Retail Trade numbers.