Friday's Market Minute: Commodity Clues During Coronavirus

U.S. equity index futures muscled their way into new all-time highs again, snapping back after last week’s downswing on coronavirus uncertainty. Nasdaq-100 futures were the first to break upward with Tesla leading the charge, spurred on by dramatic post-earnings price swings resulting in a 14%-plus weekly gain.

But the tech-heavy /NQ also held up better relative to its peers during the downward move, holding near support around 9000. S&P and Dow futures followed suit with new highs of their own on Thursday, but small-caps once again missed out on the party. Russell futures enjoyed a nearly 4% rally this week, but as of yet were unable to make new yearly highs and seem to have stalled out near 1680.Additionally, commodities have been telling a different story than equities in recent weeks, as the widespread quarantine lockdowns in China have bogged down global demand.

Crude Oil products and Copper have been devastated in 2020, while weakness is also starting to materialize in other products like Lean Hogs. Gold also behaved curiously yesterday, rising along with equities and stubbornly holding support near 1550, suggesting that the risk-on trade is not being as widely embraced as it first appeared. Watch key short-term resistance levels in /GC near 1580 and 1600 for upside breakouts and thus clues to negative sentiment.

Also, keep an eye on Emerging Markets (/MME) futures. The index, which is weighted toward China, saw sharp rejections at 1100 two days in a row, after failing to break above the 21-EMA/50-SMA resistance confluence and ending on a bearish Gravestone Doji.

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