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00:00All right. Right now time for charting futures and here's Abigail Doolittle Abigail. Stocks are trying to hold their four day slide today but running into a little bit of trouble. What are you seeing out there in the futures market. Yeah remain . It's really pretty interesting because the futures overnight we can see lots of volatility on the session overall leading into the volatility that you were just talking about. So during the Asian session we see that the futures the S&P 500 futures at one point down more than 1 percent and really recovering from that before the open of course and then into the open at one point up one point seven percent and then down a good day a good bit during the day here. And actually this is not updating here . But the point is lots of volatility on the day. And some of this volatility that we've seen more recently for the Corona virus has been foretold to some degree by the commodity complex . Take a look at this chart. We've looked at it many times because it has a powerful message up top are looking at the many futures on bottom in yellow. We're looking at the Bloomberg Commodity Index. This goes back to January 2018. So roughly the start of the trade war something that we've not talked about in a long time but still a good measure. And you see at the beginning that there was a rough correlation directionally. But then in June of last year commodities continue to go down and the S&P 500 was followed lagged in the commodities less liquid risk assets. So often the earlier tell us investors want their money out. And then we see as the S&P 500 is simply climb climb climb. We see that the commodity complex is almost in a bear market over this time period. But take a look at this. This is the first time we've looked at this chart without the S&P 500 going higher really coming back to Earth. So perhaps that commodity complex a bit of a tell on the near-term volatility . Talk more about that volatility Katie. Stocks in a fairly a strategy. Great to have you here for turning futures. And what do you think about that chart. It's a pretty huge divergence over a relatively short period of time. It's true. So to me that pullback in a way was necessary. We needed to work off some excesses in the equity market. You've already seen declines of course from commodity prices. And that was really nothing new. But it's a bit shocking when this happens of course. So what we can do is adhere to levels and the indicators to try to understand when it might end. Well you have a message that I love on this chart of the many futures up down up as you say. It just depends on your time frame. So I I her. So to me with the pullback that we've already seen there is a deeply oversold reading in the market internal measures . And by that I mean things like sentiment and breath and leadership and volume . And that does tend to give us some kind of relief rally in the coming days. And that's important to the chart because with this decline you've taking out some support. That was roughly 30 to 15 on the chart. We really want to see a nice snapback above that level to avoid confirmation of the short term breakdown here. And of course for many of the stocks that comprise these mini S&P futures we can also adhere to the Fibonacci retracement levels that you see here on the chart as potential gauges of support whether it's interim support or long term support in this case. Notice there was a half retracement or 50 percent retracement at that blue line of this uptrend . That's very normal. It's a very normal place for a bounce to develop. We're also watching that thirty eight point two percent retracement for the images. That's around 30 164 if that's taken out decisively more decisively decisively than we have so far it then targets about 30 20 based on another Fibonacci level. So these are the kind of levels that are in play that we're watching then can help us understand what kind of short term bias the market will hold. OK. So for the near term you think that we're going to have this rebound rally over the next few weeks. It could be a little bit bearish but over the months you're bullish. But I want to turn and bring commodities back into the picture because copper you have a bearish view. So you think over the longer term we're likely to see the S&P 500 go higher. Very quickly talk to us what you see about here with copper long term trading reach for copper. And of course more recently it's come down to support back from the September low. That was right around 250. And now it's made a lower high if you can see a lower high relative to another Fibonacci retracement level. So that to me is sort of a failed oversold bounce or relief rally. And I think this support levels in jeopardy based on what you see in the bottom window here which is the stochastic oscillator shows overbought oversold readings. And of course copper is not oversold here . So if it take that 250 the measured move brings it to about 241 .

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What the S&P 500 E-Minis Are Signaling About the Broader Stock Market

In this edition of "Charting Futures," Fairlead Strategies founder Katie Stockton examines the S&P 500 e-minis and copper futures with Bloomberg's Abigail Doolittle on "Bloomberg Markets: The Close." (Source: Bloomberg)

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