E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 3819.25, down 19.75
NQ, yesterday’s close: Settled at 12,297.25, down 366.50
Fundamentals: U.S. benchmarks are pointing sharply higher ahead of the bell and Tech is leading the way. The NQ was the worst performer yesterday and settled at the lowest level since November 30th. The Treasury complex is certainly aiding the rebound as the 10-year Note backs off to 1.53% from a high of 1.62%, ahead of a deluge of auctions through the next three days. Today, $58 billion in 3-year Notes will be auctioned at noon CT, $38 billion in 10-years will be auctioned tomorrow, and $24 billion 30-years on Thursday. Historically speaking, these are large amounts. Furthermore, the perpetual printing adds up. However, compared to recent auctions, such as the $62 billion in 7-year Notes on February 25th that cratered the bond market (sending yields soaring), this week’s added supply is arguably watered down. Weakness from Fed Chair Powell last Thursday carried into yesterday, but the curve flattened sharply with 5-years Note futures losing about 10 ticks compared to only five ticks from the 30-year Bond. The flattening, partly a product of a technical rejection and partly ahead of tomorrow’s CPI data, coupled with the more manageable supply this week has encouraged a consolidation across rates and is exactly what Fed Chair Powell said Thursday the Fed is not thinking about artificially controlling. This move has carried into today and is supportive to risk-assets.
Technicals: Yesterday’s close brought the rare occurrence of sellers’ exhaustion. The NQ settled at a new low and nearly took out the 10:00 am CT low from Friday, but never traded lower overnight. Tech is in rebound-mode and yesterday’s worst performers, such as Apple, Alphabet, Microsoft, Tesla, and the semiconductor space are leading today’s charge. The NQ is not in the clear just yet and yesterday created a lower peak from the exuberant Sunday night open, which was also a lower peak than pre-Powell on Thursday. We now have first key resistance at 12,625-12,662 and major three-star resistance at 12,767-12,797. We believe a close above 12,767-12,797 will then neutralize the selling from last week, but still, in order to begin repair, the NQ must close above ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
Crude Oil (April)
Yesterday’s close: Settled at 65.05, down 1.04
Fundamentals: Crude Oil is bouncing around after reversing sharply from the Sunday night high, but overall holding good technical ground. A broadly better risk-environment due to U.S. Dollar weakness and a rebound in Treasuries has staved off added selling in the energy space. If equity markets continue their overnight charge, it will be supportive to Crude Oil, but we cannot ignore the “buy the rumor, sell the news”, coming out of the weekend. Still, such has arguably played out and a constructive session today sets the stage for added gains. The EIA’s Short-Term Energy Outlook is due this morning and eyes will shift to the EIA weekly inventory data tomorrow. The big question is how much estimated U.S. production came back online last week? Also, how much this week? Early estimates for inventories are flat for Crude and draws of around 4 mb of each Gasoline and Distillates.
Technicals: The overnight low of 64.34 allows us to increase our support at 63.81-64.25 to a major three-star level; while above here, Crude Oil is in breakout mode. After trading to an overnight high of 65.98, that failed at first key resistance, price action held first key support at 64.86; the lines are drawn. Our Pivot is a pocket that includes our momentum indicator and creates a point of balance at ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
Gold (April) / Silver (March)
Gold, yesterday’s close: Settled at 1678, down 20.5
Silver, yesterday’s close: Settled at 25.269, down 0.018
Fundamentals: Gold and Silver are enjoying the rebound in Treasuries, coupled with U.S. Dollar weakness; it is just what the doctor order after the Sunday night failure and lower close yesterday. This certainly paves the way for a relief rally, and both will play a critical role as the session and week play out. Remember, U.S. CPI data is due tomorrow, and the ECB policy meeting concludes Thursday. Is this a consolidation in rates, or is this a rejection from elevated levels? For now, we are enjoying the tailwinds, but cannot ignore the massive amount of overhead technical damage; discussed in the Technical section below.
Technicals: As sentiment turned too negative through the end of last week and yesterday, Gold quietly held major three-star support at 1671-1680, our next critical level below, what was, 1704-1710. Yes, headline sentiment had turned extreme and the Commitment of Traders released last Friday, as of last Tuesday before the break below $1700, showed the lowest Managed Money Net-Long position in Gold since May 2019. This means that more sellers had sold between Tuesday and yesterday. The last time the CoT was here was before Gold broke out above its $1300 ceiling and when believers were few and far between coming out of the U.S.-China trade war’s dismantling of the metals complex. If everyone has sold, who is left to sell. In this case, there are a lot of traders on the sidelines that could carry this recovery, but remember, it is still just that, a recovery. Gold has tremendous overhead damage to now repair and a long way to go before it can begin such above rare major four-star resistance at 1757.5-1760. For now, continued action above 1710 should ultimately pave for a test to major three-star resistance at ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.