E-mini (March) / NQ (March)
S&P, yesterday’s close: Settled at 3896.50, up 23.25
NQ, yesterday’s close: Settled at 12,749.25, down 39.50
Fundamentals: Overnight, the Dow set a fresh record high for the fourth straight session. The S&P and Russell each lurk less than 1% from their records. The NQ has not only lagged, but weakness across Tech due to higher rates and the reopening rotation has broadly handcuffed U.S. benchmarks. Regardless, the leadership needed to surpass current records is in place. Over the last month, Energy is +21.3%, Financials +10%, Industrials +5.8%, and Materials +5.6%. Much of Tech, Information Technology in particular, is flat over the last week and down 5% over the last month. Ahead of the bell today, the NQ is up 1.5% and battling at two critical levels of technical resistance. A strong close today could set the wheels in motion for a melt-up, breakout, across the board into next Friday’s quadruple witching.
Weekly Jobless Claims are pivotal this morning but take a back seat to the ECB’s policy meeting. The ECB said it would purchase bonds at a faster pace through its PEPP program and that it expects yields to remain at their current levels or lower. Bund yields dove, as did rates from the U.S and has brought a tailwind to risk-assets at the onset of U.S. hours. ECB President Lagarde begins her press conference at 7:30 am CT.
Last Friday’s Nonfarm Payroll displayed the rebound in job growth, particularly the services sector, as many state and local governments begin to relax restrictions. Today’s expectations of 725,000 initial claims, due at 7:30 am CT, would be the lowest since the week before December 3rd. This was on the heels of holiday hiring and just ahead of Congress’ second fiscal bill. Ironically, President Biden signs his lauded $1.9 trillion fiscal package on Friday. It has become obvious that economic activity is picking up and jobs are lagging, but both rely heavily on stimulus measures. Yesterday’s soft CPI read paves the way for continued accommodative policy and it is no coincidence that U.S. benchmarks are, as mentioned, lurking just below their respective records one day removed.
Technicals: We have remained steadfastly Bullish in Bias through the intermediate and longer-term, although violations of support levels provided an uncertain near-term outlook. The S&P did not settle above major three-star resistance at 3899-3903 yesterday but has decisively broken out above the mark overnight. Coupled with our much more Bullish Bias on the Russell 2000 and Dow for that matter, it is cause for use to increase such Bias here, however, we must see the S&P secure that close today in order to hold it. Although we are taking such an outright Bullish outlook, we cannot ignore 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 (April)
Yesterday’s close: Settled at 64.44, down 0.43
Fundamentals: Several tailwinds have improved Crude from yesterday’s levels. First and foremost, the weaker U.S. Dollar and stable rates have encouraged a bit of an everything rally overnight. We imagine such broad strength holds and laid out levels in the S&P/NQ section that create a roadmap. Yesterday’s massive headline build in Crude inventories by 13.797 mb certainly weighed on the tape at first, however, even larger draws in the products totaling a combined 17.37 mb offset the weakness and helped the tape turn. Furthermore, the draw in these products came with a 13% increase in Refinery Utilization. Still, estimated production is back to pre-Texas-freeze levels and also weighed on the tape. All things considered, the market still has tailwinds from OPEC+ keeping production offline and an increase in geopolitical tensions. This coupled with an overall path of least resistance that has been higher, can trap shorts and create added strength to the upside. If the market can find any notion that China remains a steadfast buyer, headlines point to Iranian purchases, in the wake of softer economic data of late, we have the fundamental and technical landscape to make a move above $70 in the very near future.
Technicals: Despite never closing above Friday’s settlement this week, Crude has not closed below major three-star resistance at 63.81-64.25. It certainly battled at the level and stuck its nose below there quite a bit, however, yesterday’s post-EIA move held the overnight low of 63.13 and this allowed for quick construction and a higher close. We do have major three-star resistance at 65.55-65.65 being tested this morning and move above there today will invite added buying while a move above our next 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.
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled at 1721.8, up 4.9
Silver, yesterday’s close: Settled at 26.13, down 0.053
Fundamentals: Gold and Silver had a constructive overnight session amid a bit of an everything rally due to U.S. Dollar weakness and a stable rate picture. This continues to paint a path to recovery for each, but lower than expected Initial and Continuing Jobless Claims coupled with the little whipsaw on the heels of ECB, has brought all metals back from their overnight highs. Platinum has been the leader this week, and one that we have expected, along with Silver, to outperform Gold. The start of U.S. hours for the metals will lean on the tone that ECB President Lagarde finishes her press conference and then becomes focused on the 30-year Bond auction at noon CT. As the weekend nears, we must also ask ourselves if we have entered a time that rising geopolitical tensions in the Middle East make way for added premium into Friday’s closes. Regardless, through yesterday’s settlement at 12:30 CT, Gold grinded ever so slightly higher in a sign that sellers have stepped aside at these lower levels.
Technicals: Gold moved through major three-star resistance at 1727.5-1732.9 briefly overnight and traded to a high of 1738, in front of our 1744 key resistance. Silver also decisively moved out above major three-star resistance at 25.97-26.23 and traded to our next key resistance at 26.44-26.67. Each has peeled back ahead of the opening bell and for Gold that major three-star resistance is still very relevant; it must close above here today or faces waves of selling. However, for Silver, that previous resistance is now support and buyers must respond. Our momentum indicator for Gold comes in 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.
Your go-to place for actionable research solutions across asset classes!
Sign up for a FREE trial of proprietary fundamental and technical research!
Follow us on our social media sites to stay on the pulse of our latest research and commentary!
Twitter - twitter.com/bluelinefutures
Facebook - facebook.com/BlueLineFutures
YouTube - YouTube.com/BlueLineFutures
StockTwits - stocktwits.com/BlueLineFutures
Latest blog posts - bluelinefutures.com/blog
Blue Line Futures
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.