E-mini S&P (December)
Yesterday’s close: Settled at 3660.50, up 37.25
NQ, yesterday’s close: Settled at 12,452.25, up 174.25
Fundamentals: Both the S&P and NQ achieved fresh record highs yesterday. Tech continues to outperform and the excitement around value has settled in a bit since early last week. Although we are upbeat the market broadly and certainly find the path of least resistance higher across the board, the move in and of itself has left the Dow and Russell 2000 a step behind. However, once vaccine tailwinds dissipated yesterday and cold water was thrown over the hopes of a $2 trillion fiscal bill, all U.S. benchmarks casually retreated. Congress is back in the spotlight as they work towards a bipartisan stimulus package and funding bill to keep the government from shutting down on December 11th. We expect Washington to drive sentiment in the coming weeks and appeasing the market’s expectations is one known hurdle.
Fed Chair Powell and U.S. Treasury Secretary Mnuchin continue their Congressional Testimony at 9:00 am CT. The two, as expected, painted a different view of the economy; Powell pointed to the many ongoing uncertainties, whereas Mnuchin gave a much more upbeat synopsis. Both realize that state and local lockdowns are the number one threat. The virus surge and limited hospital capacity in California was a factor weighing on markets into the close.
Today’s economic calendar gives us the first glimpse of November job creation with the private ADP Payroll survey due at 7:15 am CT. Fed Governor Quarles and New York Fed President Williams speak at 8:00 am CT. Philadelphia Fed President Harker, a 2020 voter, speaks at 9:00 am CT.
Technicals: The tape has done absolutely nothing wrong. Each the S&P and NQ have prodded at new highs but were unable to carry the tailwind of buying through settlement. Still, the consolidation into the onset of U.S. hours has been extremely health and is holding well out above Monday’s settlement gaps. In fact, we are welcoming a retest to those major three-star support levels 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 (January)
Yesterday’s close: Settled at 44.55, down 0.79
Fundamentals: Crude is doing exactly what we called for ahead of OPEC’s decision tomorrow, a consolidation lower. There are certainly headwinds for the market at these levels. Just as the Fed Chair and U.S. Treasury Secretary spoke of yesterday, the potential of state and local lockdowns would create fresh fears of demand destruction. However, the headwinds could be much worse, and yesterday we reminded traders to tighten up their risk given the rift among OPEC members. The UAE, with backing from Russia, presented the idea of adding 500,000 barrels of production. Although we find the landscape much different than March, those uncertainties persist, and there are calls for Saudi Arabia to throw out the deal altogether and this would damage the market significantly.
For now, inventories will be in the spotlight with the EIA data due at 9:30 am CT. Last night’s API data is weighing on the tape after the private survey printed a +4.146 mb Crude, +3.402 mb Gasoline and +0.334 mb Distillates. This is much different than analysts’ expectations for today’s official data; -2.358 mb Crude, +2.386 mb Gasoline, and -0.209 mb Distillates.
Technicals: Despite the retreat, Crude Oil has done absolutely nothing wrong. We have been Bullish in Bias and even said yesterday the longer-term path of least resistance is higher, however, Neutralized our Bias given the impending uncertainties. Still, price action has held 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.
Yesterday’s close: Settled at 1819, up 38.0
Fundamentals: Gold’s rebound could not have come more perfectly scripted and today’s action is nearing the scene of the crime, 1845-1851; this will be an extremely tough area to get back above upon the first test. Today, the U.S. Dollar is gaining some ground with Brexit discussions weighing on the Euro and Pound. The first look at November jobs is due at 7:15 am CT with ADP Payroll and then Fed Governor Quarles and New York Fed President Williams speak at 8:00 am CT. Also, Philadelphia Fed President Harker, a 2020 voter, speaks at 9:00 am CT. Listen, we have mapped out Gold selloff and recovery perfectly, there is no need to be a hero if you have caught a nice $40 rip and are trading on leverage. We expect Gold to chop around, and go through our much talked about ‘bottoming process’ over the next two to three weeks and we expect this to present tremendous trading opportunities; buy the dip and sell the rip.
Although Gold lost 5% in November, Platinum gained 14%:
Technicals: Price action got out above a strong level of resistance at 1822.6-1825, trading to a high of 1835, but finds itself again battling there at the onset of U.S. hours. Our momentum indicator will be important in the near-term, it is rising behind yesterday’s rip and comes in at 1816 this morning; continued action above there and 1809 is needed for the utmost construction. Next key support is the .382 retracement on this bounce at 1809 and we would really like to see it stay above here, but we do find Gold vulnerable to major three-star support ... 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.