Updated: Jun 25
E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4213.75, up 60.25
NQ, yesterday’s close: Settled at 14,130, up 95.00
Fundamentals: What a rebound! Value roared back yesterday; the Dow gained 1.83% to the S&P’s 1.45%. Better yet, the rally did not come at the expense of Growth stocks, the NQ still gained 0.68% and every sector was positive. The strong session pinned the S&P’s settlement at the top-end of our rare major four star resistance. We noted in the Technical section yesterday that a close above here would be “extremely bullish”. We furthered that notion in our daily Midday Market Minute, saying the market is most bullish when indices work together; there is a series of levels between the S&P and NQ that could allow them to feed on each other. Fundamentally, Federal Reserve commentary is front and center to start the week. We noted here yesterday that St. Louis Fed President Bullard’s (a 2022 voter) CNBC interview Friday morning may have flushed out the hawkishness, paving the way for a Jekyll and Hyde approach where committee members appear more dovish this week. NY Fed President Williams, a permanent voting seat, said “more progress is needed before the Fed should scale back support”. He added that he was not concerned with the high demand their Reverse Repo facility is experiencing. Next up is San Francisco Fed President Daly at 10:00 am CT, she is a 2021 voter and known as one of the more dovish members. Most pivotal today though is of course Fed Chair Powell who begins a Congressional testimony at 1:00 pm CT. He will certainly field questions on the bank’s inflation expectations and the surprise sharp revision higher from 2.4% in March to 3.4% last week, after only two data sets.
Existing Home Sales are due at 9:00 am CT, along with Richmond Fed Manufacturing. Also, Eurozone Consumer Confidence is at that time and ECB Executive Board member Lane speaks then. He is followed by Schnabel, also an ECB Executive Board member at 12:30 CT. Lastly, there is a U.S. 2-year Note auction at noon CT.
Technicals: The S&P and NQ are pointing higher ahead of the bell. Yesterday, the S&P settled right at the top-end of our rare major four-star resistance. While the tape was and is overall bullish, this was not yet the decisive close we need to see. Overnight price action has waffled around the mark, holding constructively above first key support that aligns with yesterday’s opening bell surge and our momentum indicator. We find continued action above this first key support extremely constructive, allowing for the market to build for its next move higher. The NQ climbed well yesterday and on the opening bell built a floor at our first key support, now major three-star support, 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 (August)
Yesterday’s close: Settled at 73.12, up 1.83
Fundamentals: Crude Oil has peeled back from yesterday’s new swing high, the highest since October 2018. Expectations that Russia will propose an increase of production at the OPEC+ meeting next week has weighed on the tape. This comes on the heels of Bank of America saying a tighter Supply/Demand landscape could lead to $100 and after Trafigura became the latest to say Crude could reach $100 in the next 12 to 18 months. Mind you, we were one of the first, earlier this year to lay out such expectations. However, there are two sides to the coin and these calls give credence to OPEC+ mapping out a plan to bring back production. Weekly inventory data will become increasingly important into tomorrow’s official EIA report, with a strong emphasis on Gasoline stocks. Expectations will trickle out in front of the private API survey tomorrow.
Technicals: Price action settled right at the top-end of major three-star resistance at 72.70-73.25 yesterday before extending to a high of 73.36 overnight. First key support now aligns with highs from late last week at 71.82-72.07 and the tape remains bullish across all timeframes while holding out above here, however, we still need to see a close above 72.70-73.25. A move into the red on the week, below ... 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 (August) / Silver (July)
Gold, yesterday’s close: Settled at 1782.9, up 13.9
Silver, yesterday’s close: Settled at 26.025, up 0.056
Fundamentals: The metals complex is still working through the immense damage incurred last week. Whereas Gold gained ground along with Platinum and Copper yesterday, Silver struggled to get off the floor. We maintain a strong belief that there is tremendous value in this region across the metals landscape and want to be long for a tradable rebound at minimum. We again discussed in the S&P/NQ section how we find it increasingly likely Federal Reserve committee members will attempt to come off less hawkish/more dovish through comments this week. NY Fed President Williams will be on Bloomberg this morning at 8:30 am CT. This comes after he said “more progress is needed before the Fed should scale back support” yesterday. Next up is San Francisco Fed President Daly at 10:00 am CT, she is a 2021 voter and known as one of the more dovish members. Most pivotal today though is of course Fed Chair Powell who begins a Congressional testimony at 1:00 pm CT.
Breaking News, via Reuters: China's state reserves administration on Tuesday said it would publicly auction a total of 100,000 tonnes of non-ferrous metals early next month in the first round of a rare and highly anticipated release of its stockpiles.
Copper has been seemingly buoyed by the news as it was previously uncertain how much they would plan to sell.
Technicals: The battle continues, both Gold and Silver have dipped back below our momentum indicators this morning at 1782 and 25.97, respectively. They must regain these levels over the first half of the session and hold the overnight low range in order to build for a constructive settlement. Although there is strong support underneath both and they have held such, the clock is ticking for each to formally respond with a real rebound. A failure to do so will ... 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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