E-mini S&P (June)
Yesterday’s close: Settled at 2485.50, up 80.25
Fundamentals: The board is a sea of red . . . again. U.S benchmarks are locked limit lower ahead of the cash open at 8:30 am CT. The Federal Reserve launched a bazooka Sunday cutting interest rates to zero, unleashing $700 billion in QE and slashing the Reserve Requirement Ratio for banks to zero. This was not enough, yesterday they launched two new funding facilities last used during the Great Financial Crisis; a Commercial Paper Funding Facility to help with short-term loans to business and a lending program for broker dealers to access short-term cash. There are still calls for the Fed to do more. Washington is working to accompany these monetary measures by rolling out fiscal efforts of their own; an economic stimulus package of more than $1 trillion.
Yesterday, Bill Baruch joined Yahoo! Finance to discuss the S&P’s battle at 2300, the December 2018 low. Despite a favorable finish due to a tailwind of policy measures, price action quickly dissipated in Asian hours and after U.S Treasury Secretary Mnuchin said the Unemployment Rate could rise to 20%.
Benchmarks from across the world are sharply lower. Much of Europe is down at least 5%. Governments across the bloc are cooking up fiscal measures as well as a join bond offering as the virus outbreak worsens.
Given this early weakness, we are anticipating a break below the December 2018 low of 2300. Stay nimble.
Technicals: Price action is very heavy this morning on what will arguably be the sixth test for the S&P to the December 2018 low and strong support at 2350. The late rally yesterday quickly fizzled, and the settlement prices will align to create strong overhead resistance in the case of a turnaround; 2476.50-2486.50 in the S&P and 7392.25 in the NQ. However, Bill Baruch discussed with Yahoo! Finance, only a close above 2729.2750.25 in the S&P will begin to neutralize some of this damage. Trader must be prepared to understand the levels below upon a break of 2316.75. Our next strong support does not come in until ... 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 (May)
Yesterday’s close: Settled at 27.33, down 1.67
Fundamentals: Given the complete collapse of global travel and an OPEC price ware there is only very little that can change in the near-term fundamentally. By ‘only very little’ we mean a massive supply disruption, OPEC restarting talks or the Coronavirus quickly dissipating. Crude Oil has shredded through the February 2016 low and the S&P is staring down the barrel of the December 2018 low; these two could feed on each other to spark additional weaknesses. EIA inventory data is due at 9:30 am CT and the expectations are for +3.256 mb Crude, -2.89 mb Gasoline and -1.963 mb Distillates.
Technicals: Price action is at the lowest level since 2003. We see some support at $25 but the longer Crude Oil stays below 26.05, the clearer the path of least resistance becomes to 20.00. 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.
Yesterday’s close: Settled at 1525.8, down 39.3
Fundamentals: Gold responded yesterday as the U.S stock market, for all intents and purposes, was stable. The metal rallied despite tremendous strength in the U.S Dollar and weakness in Treasuries. However, as of this morning with U.S stocks turning sharply lower with the Dollar and Treasuries continuing their paths from yesterday, this has weighed significantly on Gold. Price action is battling at $1500 and technical support is in play once again.
Technicals: Gold faces another battle into our rare major four-star support at 1446.2-1452.6. Our momentum indicator aligns closely with ... 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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