- Fundamental Analysis: Fundamental analysis refers to analyzing the factors that contribute to a futures contract’s supply and demand. There are many factors that will increase demand and supply for a market. Fundamental analysis is a method used to assess the intrinsic value of an entire market (like the stock market, bond market, or real estate market) by looking at various factors that can impact its performance. Fundamental analysis takes a broader view, considering economic indicators like Gross Domestic Product (GDP) growth, unemployment rate, inflation, interest rates, and consumer confidence. A strong economy generally leads to a positive market outlook, while a weak economy can dampen investor sentiment.
- Technical Analysis: Technical analysis uses patterns on a chart created by price to determine where the market is moving. The movement of price is tracked on charts with various indicators or patterns to help determine where price is going to move next. Technical analysis uses the visual representation of price to help illustrate where price is and where it may move in the future.
- E-mini S&P 500 Futures: A fundamental analysis for the ES contract can be created by looking at anticipated forward earnings for the 500 stocks that make up the S&P500 index. Stock prices should increase if the company is growing and earnings and profits are increasing. Price is also dependent on future earnings, if future earnings are expected to grow due to prospects, the current stock price may increase to reflect this anticipated financial growth.
- Crude Oil Futures: A technical analyst might believe that there is strong resistance at $100 per barrel of oil, because every time price has reached that level, but from the fundamental persepective. The fundamental trader may have researched production costs of different producers and realized that at around $100 per barrel that many oil producers will once again turn on wells with higher production costs that were not operating when the cost of Crude was lower, increasing supply and decreasing price.
(CME, 2023, OSCILLATORS: MACD, RSI, FUNDAMENTAL ANALYSIS VERSUS TECHNICAL ANALYSIS, https://www.cmegroup.com/education/courses/technical-analysis/fundamental-analysis-vs-technical-analysis.html )