E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4245.75, up 9.25
NQ, yesterday’s close: Settled at 14,117.25, up 131.25
Fundamentals: Once again, it was the final hour that reinvigorated a lethargic tape as U.S. benchmarks surged into the close. FAANG, Software, Semis, and Tesla did the heavy lifting all session, buoying the NQ to lurk just below its April 29th all-time high. Price action roared higher over the last 30 minutes, sending both the S&P and NQ to record levels. The otherwise unenthusiastic session highlights both summer trading and an undertone of caution at elevated levels ahead of Wednesday’s Fed policy decision.
Bill Baruch joined the TD Ameritrade Network yesterday to discuss the upcoming two-day Fed meeting set to conclude Wednesday at 1:00 pm CT, his thoughts on their rhetoric and its impact on rates, Bitcoin, Crude Oil, and Gold.
Global trade is grabbing headlines after the U.S. and EU settled a dispute over subsidies to aircraft bakers Airbus and Boeing. Additionally, Britain and Australia agreed to Britain’s first trade deal post-Brexit. With deals being championed around the G7 and NATO, China is being singled out. Leaders warned that China’s “ambitions present systematic challenges to rules-based international order”. The group also condemned China’s human rights violations. China has responded by calling the U.S. “ill” in their intentions. Not so coincidentally, the price of Copper is down more than 3.5% this morning on news that China released state reserves.
The economic calendar heats up ahead of tomorrow’s Fed meeting with May Retail Sales, May PPI, and fresh June NY Empire State Manufacturing all due at 7:30 am CT. Industrial Production data follows at 8:15 am CT and there is a 20-year Bond auction at noon CT.
Technicals: We can call yesterday lethargic or unenthusiastic, and even say the market feels a tiny bit frothy, but at the end of the day it has done absolutely nothing wrong. Buyers showed up in the final half hour, pushing both the S&P and NQ to fresh records. For us, the largest feat was that settlement price upon our traditional rolling day; the September S&P trades 9 points below that of June and the September achieved a close above our confirmation breakout point at 4238.25-4241.50, previously rare major four-star resistance aligning with the old all-time high. Previous highs in the June contracts align to create first layers of support. For the S&P this is key support at 4236.50-4239.50, but second support is our major three-star level 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 (July)
Yesterday’s close: Settled at 70.88, down 0.03
Fundamentals: Crude Oil has now traded higher for 13 days in a row. Underpinning this week’s strength was no progress on an Iran Nuclear Deal over the weekend that would add supply to the market. As we have noted, officials last week said the toughest decisions lie ahead and it now seems increasingly unlikely that a deal will be ironed out soon. Furthermore, Iran’s Presidential election is Friday and the favorite is Ebrahim Raisi, who was sanctioned by the U.S. in 2019. A deluge of data this morning could underwhelm the tape as the session unfolds; Retail Sales and NY Empire State Manufacturing both missed expectations. However, early estimates for weekly inventories point to -3 mb, the seventh weekly draw in a row. Gasoline will of course be a focal point given mounting expectations for demand and last week’s surprise build of 7.046 mb.
Technicals: Crude Oil has climbed to a new swing high, and it was a constructive streak of higher lows since yesterday afternoon above our first key support (previous swing high) that paved the way for the early morning surge. On Friday, we turned our Bias to be outright Bullish, citing a higher floor in order to manage risk. At the same time, from a positioning perspective, we believe those who have been long should consider capitalizing on such strength. Our momentum indicator has climbed to ... 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 1865.9, down 13.7
Silver, yesterday’s close: Settled at 28.039, down 0.107
Fundamentals: Gold and Silver climbed out of an early hole yesterday to pare the worst of their losses. The two-day slide that began on the European open Friday morning was met with strong technical support but comes at a time of vulnerability amid a melting pot of narratives that all point back to the potential of a less dovish Federal Reserve. The committee begins a two-day meeting today, we await a policy decision and economic projections at 1:00 pm CT, followed by Fed Chair Powell’s presser at 1:30 pm CT. We keep coming back to how the Federal Reserve has told us three things. 1) Symmetrical inflation targeting, they will allow inflation to run hot. 2) They believe recent inflation is transitory, therefore, we imagine they are awaiting data for July and August. 3) They want to be behind the curve. Bill Baruch joined the TD Ameritrade Network yesterday to discuss the metals, rates, and this narrative. Economic data this morning was mixed, but overall underwhelmed and this should add to yesterday’s rebound; Retail Sales and NY Empire State Manufacturing, the two most closely watched today, missed, whereas PPI and Industrial Production, two that are arguably supportive, both came in stronger.
Technicals: Gold is working off the bloodbath, whereas Silver did not incur selling as intense and finds itself at a disadvantage today because of that. Overall, both are likely to remain rangebound ahead of tomorrow’s Fed decision. Gold now has a line in the sand drawn, we have edited support to have our rare major four-star level at 1840-1848.4. Our Pivot aligns our momentum indicator, other technicals, and settlement; continued action 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.
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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.