Morning Express

E-mini S&P (September)

Yesterday’s close: Settled at 3062, up 38.25

NQ, yesterday’s close: Settled at 9788.50, up 156.25

Fundamentals: U.S. benchmarks ripped higher on strong volume at the opening bell yesterday. As discussed here, Europe again put in a low and set price action on a positive course early Monday. Better economic data bolstered risk-sentiment and offset fears the virus is re-emerging. Fresh June NY Empire State Manufacturing was much better than feared, only showing a marginal deterioration in conditions at -0.20 versus -27.50 expected. Although this was a slight deterioration from a horrid -48.50 in May which came on the heels of an even worse -72.20 in April, when the market wants to go higher it focuses on the positives. This was a light at the end of the tunnel and a needed one after Fed Chair Powell’s bleak outlook last week. Just as when the market wants to go lower, it focuses on the negatives; Powell’s outlook. Upon 35% more volume on strength within the first 30 minutes of the 8:30 am CT open yesterday when compared to Friday’s volume on weakness, it was clear this market was going to focus on the positives. Additional tailwinds were found when the Federal Reserve announced it will roll out the planned facility to buy corporate bonds. Ultimately, the idea was not new news, they will buy individual bonds to replicate a diversified portfolio of credit. The news, though widely anticipated, did remove application requirements for companies. The market focused on the positives and ran with it.

The economic calendar brings a gauntlet today. May Retail Sales leads off at 7:30 am CT, followed by May Industrial Production at 8:15 am CT. Fed Chair Powell will certainly be front and center as he begins his two-day semiannual Congressional testimony at 9:00 am CT. April Business Inventories are also due then.

Technicals: On the heels of impressive buy-volume at the opening bell yesterday morning, price action in the S&P decisively cleared major three-star resistance by 10:30 am CT, a move that we said would fully neutralize the fresh weakness that began Sunday night and garner legs on the session. The same goes for major three-star resistance in the NQ at 9585.50-9604, a level that was cleared by 11:00 am CT. The bulls have clearly retaken the driver’s seat and price action is sharply higher again at the onset of U.S. hours. This will remain the case as long as price action stays above ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.

Crude Oil (July)

Yesterday’s close: Settled at 37.12, up 0.86

Fundamentals: Crude Oil is sharply higher this morning along with risk-assets, but the energy sector is also seeing support from the IEA Monthly Report that calls for a record rebound in demand next year. Coupled with widespread pandemic cuts, demand is expected to begin outstripping supply in the second half of this year. A combination of unprecedented stimulus measures from central banks and an economic resurgence from recessionary conditions paints a bullish long-term picture for Crude Oil. This is certainly something we have suggested, however, this initial move has blown well past our expectations. A blowout MoM Retail Sales is adding a tailwind to risk-assets ahead of Fed Chair Powell at 9:00 am CT. Early inventory estimates are for +1.228 mb of Crude.

Technicals: The bulls are in the driver’s seat on the session while holding out above our Pivot of 37.45-37.73. Below there is major three-star support and this is the line in the sand that suggests the market is trying to establish a new swing high in the intermediate-term. Overhead resistance does come in at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.

Gold (August)

Yesterday’s close: Settled at 1727.2, down 10.1

Fundamentals: Gold fell precipitously in the first half yesterday but staged a healthy comeback overnight. Unfortunately, this snapback is fizzling out on the heels of a blowout Retail Sales read, Core excluding autos was +12.4% versus +5.5%. Still, YoY Retail Sales is -6.1% and Industrial Production this morning was a big improvement from April but was below expectations. Fed Chair Powell begins his semiannual two-day Congressional testimony at 9:00 am CT. When he last spoke after the Fed’s meeting last Wednesday Gold rallied sharply. We continue to like Gold over the long-term, but in the near-term it is in a consolidation channel.

Technicals: Gold snapped back extremely well yesterday and held major three-star support at 1704-1705.8 beautifully. Our momentum indicator comes in at 1731 this morning and Gold needs to hold above here and major three-star support at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.

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