Alan Bush. December 31, 2018 STOCK INDEX FUTURES. Stock index futures are higher due to signs of progress in the U.S.-China trade dispute.

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1 Alan Bush December 31, 2018 STOCK INDEX FUTURES Financial Forecast Stock index futures are higher due to signs of progress in the U.S.-China trade dispute. On Saturday, President Donald Trump said he had a very good call with China s President Xi Jinping to discuss trade issues and claimed big progress was made. China said it is "ready to work" with the U.S. In addition to the better tone to the trade talks, some of the gains can be attributed to the growing belief that the Federal Open Market Committee may not be in a position to hike its fed funds rate in Technically, this market is looking a little better with a major downtrend line in the S&P 500 taken out on the upside in December 26. The 9:30 central time December Dallas Federal Reserve manufacturing report is expected to be 17. It may take a while, but downward pressure on interest rates globally, of course not from the Fed in the short term, will ultimately rescue this market. It is better to trade other markets where the fundamentals are more lined up in the same direction, as is the case for gold and the thirty year Treasury bond futures. CURRENCY FUTURES

2 Financial Forecast The U.S. dollar extended its losses in thin end of the year trading as expectations fade for U.S. interest rate increases next year. Interest rate differential expectations have recently turned a bit more against the greenback. The Australian dollar is higher on news of a better tone to the U.S.-China trade situation. The currency of Australia is higher in spite of news that China s factory activity contracted for the first time in over two years in December. INTEREST RATE MARKET FUTURES Futures are mostly higher despite higher stock index futures. In spite of the Federal Open Market Committee, at its December 19 policy meeting saying it plans to hike its fed funds rate two times next year, the financial futures markets believe the Fed may not be able to hike rates even one time in Currently there is only a 14% probability of a 25 basis point rate hike from the FOMC in 2019 from the current rate of 2.25%-2.50% and a 9% chance of a reduction in the fed funds rate by 25 basis points to 2.00%-2.25%. Longer term, I expect the interest rate futures market will likely trend higher, led by the thirty year Treasury bond futures. Continue to trade the interest rate futures from the long side. Gold futures advanced to a new six month high before profit taking took prices a little lower. Gold is likely to continue to advance in the longer term.

3 March 19 S&P 500 Support Resistance March 19 U.S. Dollar Index Support Resistance March 19 Euro Currency Support Resistance March 19 Japanese Yen Support Resistance March 19 Canadian Dollar Support Resistance March 19 Australian Dollar Support.7045 Resistance.7090 March 19 Thirty Year Treasury Bonds Support 145^4 Resistance 145^30 February 19 Gold Support Resistance March 19 Copper Support Resistance February 19 Crude Oil SUPPORT AND RESISTANCE Financial Forecast

4 Support Resistance Financial Forecast

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6 Financial Forecast