Morning Express

E-mini S&P (March)

Yesterday’s close: Settled at 3345.25, up 10.25

Fundamentals: It’s Jobs Friday and Nonfarm Payroll is due at 7:30 am CT. U.S benchmarks are incurring a healthy downtick ahead of the report. Some selling pressures are due to the mounting Coronavirus numbers, but others come as Germany’s economic data echoes a recession. The Coronavirus death toll has surpassed 600 and the number of confirmed cases has topped 31,000. These increases have been tamer over the last two days, however, some are warning of another heightened wave. On Monday, Germany’s Manufacturing PMI was revised a touch higher, this brought relief, but the read has been in a consistent contraction for a year now. Factory Orders fell sharply yesterday by 2.1% yesterday. This morning, Industrial Production fell by 3.5% while Imports and Exports were also dismal. What we are getting at is, where the data had begun to show a light at the end of the tunnel, such is dissipating. Traders should keep a pulse on the German DAX which is down 0.6% this morning and struggling at the record level of 13,500.

This is a great segue into today’s Nonfarm Payroll report and our narrative that this market needs to make a transition from Fed easing dependence to better data dependence. In an interview with Yahoo! Finance at the close yesterday, Bill Baruch hit on a number of topics including how a strong jobs report will fuel the next leg higher. Both ISM Manufacturing and Non-Manufacturing beat expectations this week and not-so-coincidentally stocks set fresh record highs. Analysts expect that 165,000 jobs were created in January. Wednesday’s private ADP survey posted a massive 291,000 and yes fueled stocks higher. Wage Growth is not as important as it once was. Believe it or not, there was a time long, long ago that the Fed wanted to raise rates if consumers were making more money. Expectations are for an increase of Average Hourly Earnings by 0.3%. Strong data will equate to a strong market today barring any jaw-dropping headlines.

Bill Baruch on Yahoo! Finance yesterday.

Our daily Midday Market Minute by Bill Baruch.

Technicals: Price action stayed contained by key resistance at 3344.50-3346 through yesterday’s intraday session, but more importantly provided trading opportunities against major three-star support at 3332.50-3337.50. For now, the tape is consolidating roughly within this range ahead of a more fundamental session. The NQ has traded very similarly and key resistance at 9468.25 has kept rally attempts in-check, such as last night poke to new highs. The bulls have responded to major three-star support at ... Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and prorpietary levels emailed to you each morning.

Crude Oil (March)

Yesterday’s close: Settled at 50.95, up 0.20

Fundamentals: Crude Oil gained ground shortly after the reopen last night on reports that Russia was leaning to agree on an OPEC+ production cut of 600,000 bpd. Initially, it was believed Russia wanted to wait weeks before responding, but last night’s headlines became conflicting. At first, Russia was leaning to agree, but as of this morning they plan to respond next week. Regardless, Crude Oil’s inability to rally on upbeat news on those first reports is very worrisome; we advised clients to exit profitable long trades because of such last night. Mounting concerns for the Coronavirus and the impact on energy demand ahead of the weekend is certainly weighing on risk-sentiment and this narrative will remain dominant.

Technicals: Since failing to hold gains early yesterday morning, Crude Oil has remained suppressed below our momentum indicator which noted was 51.34 here yesterday. This level comes in today at ...  Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and prorpietary levels emailed to you each morning.

Gold (April)

Yesterday’s close: Settled at 1570, up 7.2

Fundamentals: Gold has had a productive week given how it started; a failure to trade above $1600. Bill Baruch joined Yahoo! Finance yesterday and said, “Gold needs to prove it, show me a close above $1600”. Listen, we remain unequivocally bullish Gold over the long-term and as he noted yesterday, you need to have Gold in your portfolio, but you cannot chase excitement. The metal will be wholly dependent on today’s jobs data. Expectations are for 165,000 jobs created in January and Average Hourly Earnings to increase by 0.3%. The Dollar Index is at four-month highs and Gold has done extremely well in weathering its rally, but strength upon today’s jobs report may be too much for the metal in the near-term.

Technicals: Gold has had a technically constructive rally if you are viewing it through the lens of a bull. However, Gold has bounced and is failing at the right spot if you are looking through the lens of a bear. Strong key resistance comes in at ...  Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and prorpietary levels emailed to you 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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