E-mini S&P (September) / NQ (Sept)
S&P, last week’s close: Settled at 4534.50, down 0.75 on Friday and up 29.00 on the week
NQ, last week’s close: Settled 15,651.50, up 50.50 on Friday and 225.00 on the week
Fundamentals: U.S. benchmarks are essentially flat coming out of the holiday weekend. On Friday, August job growth disappointed at 243,000, but Treasury yields rose as the Unemployment Rate slipped to 5.2% and Wage Growth surged. The Nonfarm Payroll report certainly gave a lot to unpack. Although August can be a wonky month, the impact from the rise of Covid cases due to the Delta Variant was clear. The headline number is likely enough to keep an already patient Federal Reserve from announcing a taper at their meeting later this month. In fact, no taper coupled with the rise in Wage Growth stokes inflation and helps explain the move in Treasuries. Furthermore, the door is wide open for job growth to rebound in September as two critical unemployment benefit programs expired yesterday.
Today’s U.S. economic calendar is quiet, but the Treasury begins a trio of auctions with $58 billion 3-year Notes at noon CT. Tomorrow, we look to the closely watched JOLTs Job Openings figure. Last month, it showed a record 10.073 million jobs were vacant. Expectations for tomorrow are right at the 10 million mark.
Last night, Trade Balance data from China for August exuded a healthy global economy despite the rise in Covid cases. Both Exports and Imports exceeded expectations at 25.6% versus 17.1% and 33.1% versus 26.8%, respectively. The Eurozone also revised higher their Q2 GDP to 2.2% QoQ versus 2.0%. Ironically, the U.S. Dollar has gained ground overnight. This could be a sign that market participants are taking August’s job growth with a grain of salt due to mounting October expectations and the better data around the globe helps ease the Fed’s mind in tapering before yearend.
Technicals: Price action whipsawed on the heels of Friday’s Nonfarm Payroll report with the S&P setting but not holding a fresh record high. Ultimately, the tape settled in and although off its best levels it has remained rangebound through the holiday session. First key support in the S&P at 4519.25-4521.25 was tested again Sunday night and another hold paved the way for strength that ran to but could not set a record. For the S&P, our momentum indicator aligns with what has been major three-star resistance at 4540.25-4543.50. Although price action has stuck its neck above here, it has clearly slowed buying. Similarly, our momentum indicator in the NQ aligns with previous major three-star resistance at 15,634. Whereas we still have this pocket as resistance in the S&P, for the NQ it is our Pivot and point of balance, aligning with Friday’s settlement. We will look to these pockets for direction through the first hour. We do believe the S&P is signaling some exhaustion by not holding higher prices over the last few sessions and being contained by our resistance. However, until we see a break below not only first key support but major three-star support at 4502.25-4505.50, the bulls are in the driver’s seat.
Resistance: 4540.25-4543.50***, 4549.50***, 4575.50**
Support: 4519.25-4521.25**, 4510.50-4512.50**, 4502.25-4505.50***, 4488.50-4492.25***
Resistance: 15,699**, 15,905**, 16,000-16,046***
Support: 15,600**, 15,517-15,551**, 15,426-15,455***, 15,364-15,397*, 15,274-15,308***, 15,150-15,194***
Crude Oil (October)
Yesterday’s close: Settled at 69.29, down 0.70 on Friday and up 0.55 on the week
Fundamentals: Crude Oil regained the $70 mark last week for the first time since August 4th but pared the week’s gains Friday. Sellers have been in the driver’s seat for much of today’s session despite uplifting economic data. China’s Crude Oil imports rebounded in August to 10.49 mbpd from 9.71 mbpd in July. Furthermore, as noted in the S&P/NQ section, both Imports and Exports broadly topped expectations and this coupled with better Eurozone Q2 GDP signal a healthier global economy than anticipated. To the other side of that coin, it brings some ease to the mind’s of Federal Reserve committee members in announcing a taper before yearend; the U.S. Dollar has strengthened and this weighing on commodities. Also, Saudi Arabia cut prices on its Crude Oil to Asia.
Technicals: Price action has found footing against our major three-star support at 67.42-67.84 and is rebounding back toward our momentum indicator at 68.85. Traders should look to this 68.85 as a point of balance and continued action below here will define a struggle against the psychological $70 mark and encourage added selling into inventory data. The midway point of the August 23rd low and last week’s high comes in at 66.18.
Resistance: 69.29**, 69.64-69.99***, 70.61**, 71.29-71.69***
Support: 67.42-67.84***, 67.22**, 66.18***
Gold (December) / Silver (December)
Gold, last week’s close: Settled at 1833.7, up 22.2 on Friday and 14.2 on the week
Silver, last week’s close: Settled at 24.802, up 0.884 on Friday and 0.692 on the week
Fundamentals: Gold and Silver shinned on Friday after August job growth came in well below expectations. However, the move was met with selling over the holiday weekend as Treasury yields are rising ahead of a deluge of supply. Despite the miss on jobs, Wage Growth surged, and the Unemployment Rate slipped to 5.2%. Furthermore, as we highlighted in the S&P/NQ section, expectations are mounting for a rebound in job growth this month for the report released in October. The U.S. Dollar has also worked higher on the session, likely finding solace in better economic data around the world, as it has been the sacrificial lamb for the global economy. Gold and Silver now certainly have their work cutout for them.
Technicals: Gold and Silver both did not set a new high on today’s session when compared to Friday. Therefore, their reversals do not face outside bearish type daily bars. Gold is breaking below Friday’s low of 1810.9 and major three-star support at 1808.9. Next key support comes in at 1798-1801.5, and a close below here opens the door to rare major four-star support at 1775-1784. As for Silver, it is holding at the August 6th closing level, previous resistance and now major three-star support at 24.24-24.38, but a move below here opens the door for added selling into strong support at 23.88-24.00 and more.
Resistance: 1822.5**, 1835-1840***
Support: 1798-1801.5**, 1791.4**, 1775-1784****
Resistance: 24.68-24.85***, 25.64***
Support: 24.24-24.38***, 23.88-24.00***, 23.30-23.42***
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