E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4519.25, down 15.25
NQ, yesterday’s close: Settled at 15,674.75, up 23.25
Fundamentals: U.S. benchmarks have rebounded to unchanged from a soft tape overnight. Europe opened lower with the DAX losing as much as 1.5% as traders eye tomorrow’s ECB meeting. Expectations are mounting for the central bank to reduce its quantitative easing program and yesterday’s better Q2 GDP revision gives credence to the move. Hawkish committee members have made their voices heard in recent weeks, but it was former ECB President Trichet who may have soothed risk-assets early this morning. In a Bloomberg interview, the ex-head highlighted how the ECB’s program is flexible and different from the U.S. Federal Reserve’s commitment, therefore a move to reduce purchases (increased this year) is much less significant than its counterpart. The yield of the German 10-year Bund has retreated from a near two-month high.
The Bank of Canada announces a policy decision at 9:00 am CT. They are no longer expected to announce a taper of their bond purchases due to uncertainties tied to Delta, but also ahead of jobs data this Friday, and elections later this month
In the U.S., we look to more news on the jobs front with JOLTs Job Openings for July due at 9:00 am CT. Expectations are for the read to recede from June’s record of 10.07 million vacancies to 10.0 million. The Treasury will auction $38 billion of 10-year Notes at noon CT and $24 billion 30-years tomorrow. The yield of the U.S. 10-year also hit nearly a two-month high yesterday. We then look to comments from NY Fed President Williams at 12:10 pm CT.
Yesterday, Apple and Netflix each set fresh record highs and the overall tape was led by the FAANG stocks and Tesla, those that have struggled to keep pace with Alphabet and Microsoft since July. Are buyers purposely reaching for what has underperformed in a grab for yield, or is this the start of fresh rotation? The concentrated strength aided Communication Services +0.45%, Consumer Discretionary +0.36%, and Information Technology +0.03% in being the only sectors to cling to positive territory.
Technicals: Price action in the S&P yesterday held out above major three-star aligning with an intraday gap from August 27th at 4502.25-4505.50. Added healthy weakness overnight traded through here to a low of 4497 before rebounding to first key resistance at 4519.25-4521, aligning our momentum indicator with yesterday’s settlement; continued action below here will leave the tape vulnerable to healthy selling that will attempt to breach major three-star support intraday. As for the NQ, it set a fresh record high yesterday and price action remains near unchanged. Our momentum indicator aligns with previous major three-star resistance and Friday’s settlement as our Pivot and point of balance. Also, first key support 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.
Crude Oil (October)
Yesterday’s close: Settled at 68.35, down 0.94
Fundamentals: Crude Oil has rebounded by as much as 1.5% as expectations for draws across the board mount for tomorrow’s hurricane effected inventory data (-3.832 mb Crude, -3.61 mb Gasoline, -2.95 mb Distillates). The private API survey will be released after the bell. An added tailwind is coming from ongoing production uncertainties in the Gulf of Mexico. According to Reuters, due to power outages about 1.5 mbpd or 84% of the production remains shutdown. Also, data showing stronger demand from China is helping to underpin the tape; yesterday we noted, Crude Imports rose in August to 10.49 mbpd from 9.71 mbpd in July. Traders must keep a pulse on the broader risk-landscape while also accounting for bullishness already being discounted for in inventory data.
Technicals: Price action turned positive on the week, trading above 69.29, and we will look to use that mark as our Pivot and point of balance. To the upside, strong resistance stands at 69.64-69.99 and will work to keep a lid on this rally attempt ahead of inventory data. To the downside, our first key support is ... 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 (December) / Silver (December)
Gold, yesterday’s close: Settled at 1798.5, down 35.2
Silver, yesterday’s close: Settled at 24.373, down 0.429
Fundamentals: On the bright side, yesterday’s failure in Gold and Silver did not turn into added weakness overnight. Each has held ground very well given the sharpness of yesterday’s reversal and despite the U.S. Dollar Index gaining ground on the session. They are certainly not in the clear and mounting fundamental risks on both sides of the trade are clear heading into tomorrow’s ECB policy announcement. But first, we look to more news on the jobs front with JOLTs Job Openings for July due at 9:00 am CT today. Expectations are for the read to recede from June’s record of 10.07 million vacancies to 10.0 million. More job openings will underpin U.S. Dollar strength. The Treasury will auction $38 billion of 10-year Notes at noon CT and the yield hit nearly a two-month high yesterday; higher yields will weigh on the metals complex, but if strong foreign buying shows up again, it will help support Gold. We then look to comments from NY Fed President Williams at 12:10 pm CT. Like we said yesterday, both Gold and Silver have their work cut out for them over the next couple of months, but wherever they land, we expect a great buying opportunity.
Technicals: Price action held ground overnight and Gold finds itself battling at the $1800 mark. While there is solid support buoying the tape at 1791.4 and yesterday’s low of 1793.7, our momentum indicator has slipped to 1801 and continued action below here will encourage selling. Ultimately, Gold must close back above major three-star resistance 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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