Morning Express

E-mini S&P (September)

Yesterday’s close: Settled at 3107, down 11.25

NQ, yesterday’s close: Settled at 9983, up 21.50

Fundamentals: After a soft finish yesterday, U.S. benchmarks trekked lower last night and found strong major three-star support. Price action has ping-ponged around ahead of the U.S. session, Initial Jobless Claims and Philly Fed Manufacturing. Central banks are grabbing headlines this morning; the ECB unleashed a record cash injection, the SNB promised to fight Franc strength and the Bank of England announced a 100-billion Pound stimulus program. The ECB ramped up their TLTRO program and banks borrowed 1.3-trillion Euros at a rate of -1%. However, the operation only netted to add about 550-billion Euros. Banks across Europe are lower, but so are risk-assets broadly.

Fed Chair Powell concluded his two-day semiannual Congressional Testimony yesterday and markets seemed to key off his emphasis that Congress must not back down from supporting individuals and small businesses through fiscal policy. The strength did not last through the session as virus concerns cast a cloud of uncertainly on risk-sentiment at these elevated levels. Additionally, a Uighur Rights Bill signed by President Trump yesterday to punish China further deteriorates relations between the two nations while the Phase-One trade deal and China’s treatment of Hong Kong have also caused friction.

Technicals: We have held a cautiously Bullish Bias this week with major three-star support in the S&P at 3062-3072.25 being our line in the sand. Another test last night held before price action elevated. However, that overnight strength is dissipating into this morning and brings a concern that a third test may not hold. However, if this level proves to hold through today, there is a constructive bull-flag pattern budding in the S&P and one that could ultimately power it back to recent swing highs at a minimum. Weighing the two outcomes, a violation of support or a hold and bull-flag breakout, we want to emphasis that we will only continue to hold this cautiously Bullish Bias as long as support holds. Our momentum indicator comes 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 each morning.

Crude Oil (August)

Yesterday’s close: Settled at 38.21, down 0.44

Fundamentals: Several narratives are pushing and pulling on the complex. In the end, EIA estimated production fell by 600,000 bpd on yesterday’s report. Furthermore, what were expectations for a draw of Crude stocks as early as Monday became expectations for a build. The private API survey called for a build of 3.857 mb and when the official EIA report only posted +1.215 mb Crude, it was actually supportive. U.S. and China trade and the Uighur Bill signed by President Trump yesterday could be holding the market back from additional gains. Risk-sentiment broadly will sway the tape at these levels.

Technicals: We have had a cautiously Bullish Bias and will continue to keep such on the week with price action above 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 each morning.

Gold (August)

Yesterday’s close: Settled at 1739.6, down -0.9

Fundamentals: Gold failed on the heels of strong overnight price action. Geopolitical tensions on the Korean Peninsula and on the China-India border should be enough alone to lift Gold through previous highs and its struggles are becoming concerning. U.S.-China tensions are also heating up on trade, Hong Kong and after President Trump signed the Uighur Rights Bill. The ECB unleashed its largest TLTRO program yet and the Bank of England rolled out stimulus. Risk-assets, stocks, are lower across the globe and yet, given all of this, Gold is 1% from the overnight high. The Treasury complex is higher and maybe this can help dig Gold out of the depths of its reversal. Initial Jobless Claims and Continuing Claims both where higher than expected, but the headline Philly Fed Manufacturing snapped back much stronger than anticipated.

Technicals: Overnight, Gold traded to a new high on the week but quickly fell back below the 1737-1743 pocket, one that has been extremely sticky. The failure has pushed price action back to test 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 each morning.

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