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Is Inflation on your Radar? | Actionable Research for Equities, Energies, and Gold | Morning Express

E-mini S&P (December)


Yesterday’s close: Settled at 3668.50, down 4.00


NQ, yesterday’s close: Settled at 12,402, up 35.00


Fundamentals: U.S. benchmarks are as subdued as a fiscal deal in Washington is elusive. Overshadowing negotiations is the potential of a shutdown and this has certainly added a layer of uncertainty. Markets do not like uncertainty. The House passed a stopgap bill yesterday and the Senate must approve it before tonight’s midnight deadline to avert a shutdown. As for coronavirus aid, Senate Majority Leader McConnell and House Speaker Pelosi are at sharp odds over protecting companies from virus-related liabilities. McConnell’s desire to limit aid to state and local governments is also slowing progress and market’s fear such will erode the $900 billion price tag. However, if lawmakers simply affirm the near $1 billion package and Senate passes the stopgap bill allowing for another week, this could pave the way for markets to pare early losses ahead of the weekend; less uncertainties.

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Across the pond, U.K. and EU lawmakers also remain at odds as a Brexit deadline looms. Negotiations will continue into a self-imposed deadline Sunday, but U.K. Prime Minister emphasized a “strong possibility” that Britain will leave the EU on January 1st without a deal. The British Pound is down about 1% this morning.

Daily Covid-19 deaths tallying 3,000 is also weighing on sentiment. The FDA is working to approve an Emergency Use Authorization for the vaccine developed Pfizer and BioNTech. Pfizer’s stock is up 1% premarket after a panel of independent industry experts gave their approval.

Michigan Consumer data, fresh for the month of December, is due at 9:00 am CT. U.S. PPI data this morning came in a touch below expectations, a day removed from a firm read on the closer watched CPI inflation indicator.


Technicals: Each the S&P and NQ traded higher through yesterday afternoon but failed exactly at the critical levels of first resistance we noted here yesterday. For the S&P this was 3679-3681.25 and for the NQ this was 12,448-12,502. Each rallied of strong levels of technical support early yesterday, but ultimately the inability to clear those resistance levels left the market vulnerable, just as we detailed here yesterday. Our momentum indicators come as ... 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 46.78, up 1.26


Fundamentals: Our narrative from Wednesday’s EIA data began playing out immediately as traders focused on last week’s widening gap between Imports and Exports as a short-term shift that would be drawn down by strong U.S. demand through the month of December. Tailwinds also came from renewed weakness in the U.S. Dollar, a firm CPI read, and a technical breakout. Crude traded to the highest level since March 5th. While we do find the path of least resistance higher, the Dollar is firming a bit this morning on a weaker British Pound and Euro. Furthermore, risk-assets are on their backfoot as Congress remains deadlocked. For this reason, we advise against chasing strength, instead traders should have capitalized on yesterday’s strength.


Technicals: We want to exude caution at elevated levels although we will remain more Bullish in Bias. We have been Bullish, and the trend is clearly higher with $50 in sight, however, uncertainty seems to be the sentiment early and this is cause for caution in positioning. Today, our momentum indicator 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.

Gold (February)


Yesterday’s close: Settled at 1837.4, down 1.1


Fundamentals: Gold continues to do nothing wrong since its rebound began last Monday. Overall, the U.S. Dollar has not made a new low this week and this has kept the precious metals space contained. With some currency volatility tied to Brexit talks, it is really U.S. fiscal negotiations that markets are waiting for. Per our discussion in the S&P section, it is about removing uncertainties; if the Senate passes the stopgap bill today, the path is perceivable paved for coronavirus aid (until it is not). For us, we are confident in the intermediate to longer-term outlook that couples continued weakness in the Dollar with a pickup in inflation and sets those on a collision course with the year’s most seasonally bullish time that begins December 23rd.

Bill Baruch joined CNBC’s Halftime Report yesterday to follow up last week’s Platinum trade.


Technicals: Although Gold has not held the best of standards set earlier this week, remaining above 1852.7, it also has not collapsed through major three-star support at 1823.5-1825. In fact, the metal’s response to this level that aligns multiple technical indicators with the 200-day moving average has kept us very positive. As the clock ticks closer to such seasonal bullishness and considering the fact that Gold’s rear-view mirror includes a perfect roadmap through the December expiration, we will remain more Bullish in Bias as along as major three-star support holds. Our momentum indicator 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.


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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.

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