Morning Express

E-mini S&P (March)

Yesterday’s close: Settled at 3132.50, down 93.75

Fundamentals: U.S benchmarks are attempting to hold ground after yesterday’s bloodbath. The S&P settled 7.8% from last week’s fresh record and the NQ 9.3%. We can now call this a correction, but still a very healthy one. Remember, we pointed to over-exuberant sentiment last week when the NQ set a new all-time high for 12 straight sessions and the S&P for seven. This washout, or cleansing if you will, was largely needed.

The number of Covid-19 cases and deaths continue to spread. Europe is alarming the risk-appetite as infections in Italy mount to over 300 and the death toll reaches 11. France reported its first death and both Barcelona and Madrid each reported their first cases while the numbers continue to climb in South Korea and Iran. The S&P quickly plummeted by about 2% when Europe opened earlier this morning.

The Federal Reserve’s next meeting is March 19th and the odds for a cut have risen to a one third probability. Furthermore, after what was nearly back to back 100-point losses in the S&P, the odds for a cut by the April 29th meeting have hit 65%. Today’s economic calendar again boasts Dallas Fed President Kaplan. The 2020 voter said yesterday that it is too soon to tell if the central bank will need to cut rates because of the impact of Covid-19. Also, Minneapolis Fed President Kashkari, the most dovish committee member and 2020 voter, speaks at noon CT. New Home Sales are due at 9:00 am CT and energy inventory data is released at 9:30 am CT. Crude Oil has made a new low and finds itself at a massive level of technical support (discussed more in the Crude Oil section).

Yesterday, Bill Baruch broke down the levels to know in markets across the board in his daily Midday Market Minute.

Technicals: Price action slipped sharply to new lows at 2:00 am CT when Europe opened, but has attempted to stabilize since. The crucial Pivot levels of stabilization today are .... Please sign up to receive our entire technical outlook, actionable bias and proprietary levels by email each day.

Crude Oil (April)

Yesterday’s close: Settled at 49.90, down 1.53

Fundamentals: Crude Oil dove lower early this morning after the European open along with other risk-assets. Price action reacted favorably to yesterday’s private API survey gaining a bit more than a quarter after they reported +1.3 mb Crude, +0.074 mb Gasoline and -0.706 mb Distillates. Expectations for the official EIA data are for +2.005 mb Crude, -2.245 mb Gasoline, -1.713 mb Distillates. After picking up last week, Refinery Utilization is expected to dip again meaning that less Crude Oil is pulled into create products. The Saudi Energy Minister continues to jawbone next week’s meeting saying the cartel must pay attention to Coronavirus and take responsible steps.

Technicals: Price action battled at the psychological $50 mark for much of the session yesterday before slicing through overnight and trading to a low of 48.99. This was a direct test to our rare major four-star support that aligns a trend line form the February 2016 low; a decisive break and close below here is very negative. For now, our momentum indicator comes in at ...  Please sign up to receive our entire technical outlook, actionable bias and proprietary levels by email each day.

Gold (April)

Yesterday’s close: Settled at 1650, down 26.6

Fundamentals: Gold is slipping by about 1% this morning ahead of New Home Sales as equity markets firm up just a bit after the cash open. It was no secret that Gold exacerbated the upside Sunday and into Monday, this was textbook Gold and right in line with our “all-the-time” Gold narrative – you do not want to be buying Gold when everyone is screaming for it, you want to be capitalizing on Gold you already own. To be honest, we could certainly see more downside from here but there are strong technical levels of support to lean on. Lastly, the odds for a Fed cut as soon as March 19th have risen above 30%, however, Gold seemingly priced such in early in the week; we now need to see those odds become greater in order to fuel the metal.

Technicals: Price action has chewed through as strong level of major three-star support at 1645.9-1648.8. Our momentum indicator has followed and now aligns with this pocket. We must see a close above here in order to neutralize this wave of selling. We have major three-star support and our downside target on this wave of relief at ...  Please sign up to receive our entire technical outlook, actionable bias and proprietary levels by email each day.

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