Morning Express

E-mini S&P (March)

Yesterday’s close: Settled at 2747.75, down 216.25

Fundamentals: A day removed from chaos, U.S benchmarks have snapped back by as much as 4%. The tape opened last night for today’s session and nudged a new low before President Trump brought a sense of calm. The White House promised relief measures that are expected to include a payroll tax cut and aid to the hardest hit industries. Benchmarks from around the world have also been jumpstarted by this tailwind. In Europe, the DAX is up about 3% and the FTSE 4%. In Asia, the Hang Seng and Shanghai Composite have each gained about 1.5%. Yields are also stabilizing with the U.S 10-year Note doubling from yesterday’s low of 0.36% to a high at 6:00 am CT of 0.742%. The U.S 30-year Bond yield is, for now, handedly back above the 1% threshold. Each has covered a technical resistance gap from Friday’s close.

Are we in the clear? There is no way to conceive such an answer. What we do know is that uncertainty is rampant, and we always say markets hate uncertainty. The economic impact of the Covid-19 around the globe is still largely unknown. Furthermore, the outbreak only potentially being in the early stages domestically leaves even more uncertainty. In the coming days and weeks, we will start to get a pulse on some of the economic damage at what was the onset of the virus through February and this will lead into Q1 earnings a month from now. The most prominent aspect you must consider right here, right now is your timeframe. Yes, there are great long-term values out there and our Registered Investment Advisor Blue Line Capital would love to discuss just this. However, if you have a shorter-term trading timeframe, you must rely more on the technicals discussed below.

Bill Baruch joined the CNBC Fast Money desk last night to talk about Gold.

Technicals: This overnight recovery is beginning to run into the thick of last week’s damage, this means several strong waves of resistance. Previously strong support at 2853-2857.25 in the S&P and the 200-day moving average in the NQ at 8214 now bring major three-star resistance. Each of these levels carried from last week now also align with freshly created resistances given the new ranges. For the S&P this is now major three-star resistance at ... Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning. 

Crude Oil (April)

Yesterday’s close: Settled at 31.13, down 10.15

Fundamentals: Crude Oil finished yesterday’s historic session down 24.5%. On the bright side though, it also finished 13.8% from the low, a low that held the 2016 fallout by more than a dollar. Do we know a low has been set? Absolutely not. However, take a step back and look at what was done. Saudi Arabia ignited an unprecedented price war. They are further escalating this price war in theory by promising to increase production to 12.3 mbpd, 2 mbpd more than current levels. First, Saudi’s cheaper Oil flooding the market is purchased over that from the U.S and other producers. This means inventories at significant places like Cushing will become backed up if those prices remain higher. The quick ripple impact was last night’s gap lower on the open to converge prices. Additional pressures come from producers who must hedge what they can at whatever level available. Now, the second layer here is cheap Oil creates demand. This move by Saudi Arabia is in essence a demand stimulus. Remember, the impact of Covid-19 was a demand deterioration. Yes, there is tremendous technical damage out there, but this landscape is quickly developing and everyone from Saudi Arabia to Russia and the U.S likely prefers a resolution sooner than later.

Phillip Streible, Chief Market Strategist, joined Yahoo! Finance yesterday to talk Crude Oil.

Technicals: We had a slight Bearish Bias last week and carried it into yesterday. We have now Neutralized this Bias and searching for value plays in expectations of a snap back. Price action is holding above our momentum indicator at ... Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning. 

Gold (April)

Yesterday’s close: Settled at 1675.7, up 3.3

Fundamentals: Bill Baruch joined CNBC’s Fast Money desk last night to talk about Gold and express his narrative, one you always hear from us: you do not want to be buying Gold when everyone is screaming for it, that is when you want to be capitalizing on Gold you already own. The metal could not hold $1700 in a day that the Dollar was down by 1% and Treasuries surged unprecedently. So, what held Gold back? First off, this is a deflationary environment and the entire metals complex, other than Gold, got clobbered yesterday. Furthermore, liquidity conditions were tight as investors and traders were forced to sell stocks due to margin calls or raise capital through other means such as selling Gold. Remember, the metal is up 11% this year and in a bull market, there will be a time to buy but patience is key.

Technicals: Price action settled right within our pivot yesterday and that settlement price will now act as overhead resistance. Our momentum indicator is lower at 1668 and the tape is not only handedly below here this morning, but also the 1662.5 support; this will continue to pressure prices into the overnight low of 1649.4 and our major three-star support at 1642.9-1644. This is ok, as we want to find a value opportunity below 1620. Only a close back above ... Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary 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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