E-mini S&P (December)
Yesterday’s close: Settled at 3606.75, down 16.25
NQ, yesterday’s close: Settled at 11,975, down 30.00
Fundamentals: The S&P is battling to hold out above last Friday’s settlement, a gap that was all but fully filled twice now; yesterday’s session low of 3586 and today’s 3585.75. In a landscape with many moving parts and coming off weekly gains of 7.2% and then 2.3%, holding out above Friday’s settlement in such a constructive manner is all the bulls can ask for. Value stocks had already begun to come off an election loll, but it was Pfizer’s Monday November 9th vaccine announcement that truly powered them over the last two weeks. Of course, Eli Lilly and Moderna have added tailwinds. This has forced managers to look to 2021 and further, notwithstanding distribution hurdles. Instead, more importantly, to plan an endgame to an earnings suppression. When news comes in bits and pieces, those tailwinds have an added lifespan in a market that now prices in news the second it hits the tape. Today, Pfizer and BioNTech said their Covid-19 vaccine is 95% effective and plan to file for an Emergency Use Authorization. This sets it in line with Moderna’s results and the stocks have acted accordingly. Bill Baruch joined CNBC’s Fast Money Halftime Report to breakdown the Dow’s record run. Can it keep going? The resilient consumer is in the spotlight this week. Yesterday’s October Retail Sales data certainly underwhelmed and September’s read was revised lower. This weighed on solid earnings beats from Home Depot and Walmart. Target easily topped earnings estimates this morning with help from online sales. The stock is up nearly 3% premarket. However, Lowe’s fell shy of lofty expectations and the stock is down more than 6% premarket. Increased spending from Lowe’s, like Home Depot, weighed on its overall report. Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning. Building Permits and Housing Starts were overall firm this morning. Chicago Fed President Evans, a 2021 voter, speaks at 9:00 am CT. ECB President Lagarde also speaks then. EIA Crude Oil inventory data is due at 9:30 am CT. NY Fed President Williams, a permanent voting seat, speaks at 11:15 am CT and St. Louis Fed President Bullard follows at 12:20 pm CT. Atlanta Fed President Bostic, a 2021 voter, speaks tonight at 6:00 pm CT. There is a 20-year Bond auction at noon CT. NVIDIA reports earnings after the bell.
Technicals: Not much has changed in the technical landscape from yesterday, but the bulls are building their case for higher prices by responding to critical levels of technical support. For the S&P, major three-star support comes in at 3576.25-3582 and for the NQ, key support levels at 11,933-11,956 and then 11,820-11,850 have done a terrific job as the week has unfolded. The task now is for the NQ to clear major three-star resistance at 12,062-12,098. We believe this would spark a broader market move, one that lifts the S&P back to its 3661 high and powers the Dow through 30,000 and the Russell 2000 through 1815. Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning. Bias: Neutral/Bullish
Resistance: 3622.75**, 3637-3645**, 3662***, 3700****
Support: 3590**, 3576.25-3582***, 3547.50-3552.50**, 3532.75**, 3498.75-3500.75**** NQ (December)
Resistance: 12,062-12,098***, 12,225-11,260***, 12,397***, 12,450***
Support: 11,933-11,956**, 11,820-11,850**, 11,775-11,784***, 11,703-11,717**, 11,588-11,618***, 11,502**, 11,265-11,304**** Crude Oil (January)
Yesterday’s close: Settled at 41.65, up 0.08
Fundamentals: It is no surprise to see Crude Oil higher after the expiration of December options yesterday, the most highly focused contract each year. The trend has been buoyant, but options expiration can cap price action from exceeding high Open Interest strikes. Not only did the $40 strike bring a floor that Crude Oil rejected yesterday, but Open Interest within range of $45 kept a lid on rally attempts over the last week and a half. Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning. More fundamentally, the announcement of Pfizer’s vaccine success rate this morning has helped lift Crude back above the $42, as it now settles in a bit. Inventory data is in focus today, but OPEC+ is highly in focus over the next two weeks. First, Crude’s overnight strength came despite a bearish private API survey reported after the bell yesterday. It posted +4.174 mb Crude, +0.256 mb Gasoline and -5.024 mb Distillates. Despite the draw in Distillates, the headline Crude read certainly weighed on the tape. Analyst expectations for today’s official report are +1.65 mb Crude, +0.087 mb Gasoline, and -1.457 mb Distillates. There was no definitive decision from OPEC’s JMMC meeting yesterday, nor was there the expectation of such. Although there are reports that the November 30th to December 1st meeting will be a tough one, we find it not so to delay the production cut taper but instead to remove additional production given the surge in virus cases and restrictions. This could become a supportive narrative between now and then.
Technicals: Price action is trading against major three-star resistance at 42.15-42.36, a sticky level that has slowed buyers in recent months. Our Pivot is our momentum indicator, this will be a crucial level of balance through today at 41.62. The bulls responded to yesterday’s weakness at major three-star support at 39.78-40.17 and this set the stage for today’s rally. We will remain cautiously Bullish in Bias while this level holds. Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning. Bias: Neutral/Bullish
Resistance: 42.15-42.36***, 43.33-43.83***, 44.60****, 46.42***
Support: 39.78-40.17***, 38.65**, 37.49-37.59*** Gold (December)
Yesterday’s close: Settled at 1885.1, down 2.7
Fundamentals: Gold incurred late selling yesterday after settlement on no real news flow. Those losses extended to a new low on the week after Pfizer announced a success rate of 95% across patients in its Phase 3 trial and 94% for those 65 and older. This again creates selling as it implies the Federal Reserve may have to do less. We have discussed this narrative and welcome the selling because it gives us a better buy opportunity. Fundamentally, we are focused on the Federal Reserve’s promise to allow the economy to run hot, the many hurdles between now and a vaccine being mass distributed, and the unknown damage to the economy due to lockdowns and restrictions. Secondly, we are looking forward to the expiration of the December contract next week, the first step in laying the groundwork for the upcoming bullish seasonal trade.
Technicals: There is no denying that some of this selling is technical. Gold has not been able to hold out above major three-star resistance at 1893 and furthermore, cannot get within proximity of 1907, a level that would neutralize the November 9th slam-down. There is key support at 1861.5-1865 and the bulls must work to buoy the tape above here or face continued selling that could crack through our rare major four-star support at 1845.4-1851 upon a ninth test. Yes, nine tests! The Pivot at 1873 is a point of balance, the 50% retracement on this consolidation range. A move back above 1878.9-1880 today will neutralize today’s selling. Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning. Bias: Neutral/Bullish
Resistance: 1878.9-1880**, 1893***, 1907***, 1921**, 1936-1942***, 1962.1-1970***
Support: 1861.5-1865**, 1845.4-1851****, 1825-1829.8***
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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.