A Historical Squeeze, Hi-Ho Silver | Actionable Ideas with the Blue Line - Morning Express

E-mini S&P (March) / NQ (March)


S&P, last week’s close: Settled at 3705.25, down 74 on Friday and 129 on the week


NQ, last week’s close: Settled at 12,911.25, down 274.75 on Friday and 450.25 on the week


Fundamentals: U.S. benchmarks are rebounding from last night’s lower open and finding tailwinds from a sense of broad enthusiasm bleeding across the risk-landscape. Given the waves of selling through the latter half of last week, coupled with price action now retesting a critical level of resistance, we are eager to see if equity markets hold these overnight gains through the first hour of intraday trade. Last week, there were spurts of panic and such could have satisfied the market profile ahead of a jam-packed week of economic data and earnings.

ISM Manufacturing for January is due at 9:00 am CT and highlights today’s fundamental backdrop. The read is expected to expand at the 60.0 blowout pace incurred in December (60.5). Tomorrow, we look to earnings from Tech behemoths Amazon and Alphabet after the bell. The week culminates with January jobs data Friday. Were jobs added after December’s fiscal package was passed?


Above, we referenced a broad sense of enthusiasm across the risk-landscape. We cannot ignore the dash for trash, stick it to Wall Street short squeezes. Whereas we do believe many corners of the market were dislodged last week and this aided waves of selling or liquidation, we do believe the market was left wanting more on the stimulus front. Let us not forget that at the turn of the year, President Biden lauded a $1.9 trillion fiscal package. This has now been delayed until mid-March and the market had previously priced such in for much sooner. Furthermore, we spoke here on how the market last week had to digest new information from the Federal Reserve. Although there may not have seemed to be anything new, the argument could be made that during this time of unprecedented stimulus, the market had to prepare for a more dovish Federal Reserve, something that it did not get. We believe all of this had a hand in last week’s healthy correction.


Technicals: We are broadly reintroducing a cautiously Bullish Bias. In fact, if we were still at 3652.50-3657.75 major three-star support, or within that range, we would be more Bullish in Bias. We like buying against this level to start the week, and last night did so on the desk. What traders must understand though, is at this recovery level, we are trading against major three-star resistance, previous support, at 3738.50-3740.75 and traders should not chase, but instead wait for a pullback that then gains stability. Added resistance also exists overhead and similarly, the NQ has 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.

Crude Oil (March)


Last week’s close: Settled at 52.20, down 0.14 on Friday and 0.07 on the week


Fundamentals: Crude Oil has again responded to major three-star support. The complex is finding broad risk-on support given the enthusiastic and inflationary environment being created by Silver. Additionally, a unified OPEC+ has increased compliance and is not adding supply in February; this is adding a tailwind. However, Chinese Manufacturing PMI last night came in light and this coupled with U.S. Dollar strength to start the week is trying to throw cold water over the supportive narratives. All things considered, Crude Oil remains in a consolidation pattern and must breakout of its technical range.


Technicals: Major three-star support won for the fifth time last night as price action hit a low of 51.64 and the bulls defended the selling. The tape has snapped back into U.S. hours and our momentum indicator will be crucial as our Pivot at 52.45 in order to hold the early enthusiasm. Regardless, we must see a close out 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.

Gold (April) / Silver (March)


Gold, last week’s close: Settled at 1850.3, up 9.1 on Friday and down 9.6 on the week


Silver, last week’s close: Settled at 26.914, up 0.992 on Friday and up 1.358 on the week


Fundamentals: Hi-Ho Silver! This is everything we could have dreamed of and we said last week, the Silver market could be in store for a historical short squeeze. However, this does not mean you should live in a YOLO or HODL dream; be smart right here, right now and reduce your position, take some profits. If you are unsure of what to do, please reach out to our trade desk at 312-278-0500. All short squeezes aside, this is a jam-packed week of economic data and Silver is not the only asset starting the week on strong footing, so is the U.S. Dollar. Today’s ISM Manufacturing was lighter than expected, but prices surged to a decade high; this is a sign of massive demand and the inflation tailwinds that are lurking. Traders must keep a pulse on the U.S. Dollar’s strength as the week unfolds.

Watch Phillip Streible’s live interview with Kitco on the open last night.

Watch Bill Baruch’s interview from Friday, discussing the potential of a physical squeeze on Silver.


Technicals: Last week, we turned outright Bullish across the metals space, it is now time to reduce our Bias slightly as traders MUST lock in gains. At this time, we must point out that Gold is vastly underperforming Silver and is truly battling at our Pivot of 1862-1866.5, which aligns with our momentum indicator. For Silver to chew through rare major four-star resistance at 30.00-30.73, Gold really needs to hold out above this ... 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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Blue Line Futures

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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.

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