• Bill Baruch

Morning Express


E-mini (March)


Yesterday’s close: Settled at 3015.50, down 99.25


Fundamentals: Managers, investors and traders alike are not running for cover in fear of Nonfarm Payroll (or are they?). This is the most vicious reach for safety arguably ever with uncertainty looming for not only Q1 earnings 30 days out but simply over the impending weekend as Covid-19 spreads in the U.S and the death toll surges in Italy. The 30-year Bond has gained as much as six handles in this historic session with the yield falling sharply to a new record low of 1.272%, surpassing our downside target of 1.32%. The 10-year Note yield has fallen to a low of 0.696%, but look on the bright side, the 3-month Bill was halved this week and the two are no longer inverted (at 0.55%). Although we have always and unequivocally held a rhetoric that yields are heading lower for longer, even we are in awe of such velocity seen in recent days and weeks. Yes, we could see a strong jobs report at 7:30 am CT. However, this is much more than jobs. Only a sense of calm coming out of the weekend will work to abate some of this mounting panic - and that would theoretically be a good start.


Analysts expect 175,000 jobs to have been created in February with hourly wages gaining 0.3%. Traders certainly shouldn’t ignore this number, but economists are digesting all data with a very large grain of salt. For instance, look at Manufacturing PMIs that responded positively to supply chain distortions or the diverging Services reads discussed here yesterday. Even this morning, January German Factory Orders surged by 5.5%, exuding how the data has not yet accounted for this mass outbreak.


Technicals: The S&P is down nearly 100 already this morning, not only leaving a gap from yesterday’s close but trading sharply below the Tuesday gap [higher] at 2997. We will combine these two levels which encompasses where our momentum indicator is this morning as major three-star resistance at 2997-3015.50. Only a move out above here today will neutralize this weakness and pave the way for a run back to the post-Fed rate-cut spike. So, what now? We expect wide ranges to continue and a rally that retests 2997-3015.50 is certainly not out of the questions. The same goes for the NQ testing to at least 8508.25-8512.50. Traders must stay nimble. However, continued price action below ... Please sign up at Blue Line Futures to receive our entire technical outlook, actionable bias and proprietary levels by email each day.





Crude Oil (April)


Yesterday’s close: Settled at 45.90, down 0.88


Fundamentals: Crude Oil is down about 5% this morning. Weakness has ensured amid global panic (see the S&P section) and as Russia pushes back on unified production cut. The OPEC+ meeting is still taking place and reportedly has paused as Russia has “side-consultations” with other countries. Saudi Arabia and its perceived allies are pushing for a cut of 1.5 mbpd to last to June but just as importantly for the cartel to agree to extend the current cuts through the remainder of 2020. Traders must stay nimble as developments continue on not only this front but the broader risk-environment.


Technicals: Given today’s early action, the tape failed dramatically this week at our rare major four-star resistance at 48.99-49.50. This paved a path of least resistance to ...  Please sign up at Blue Line Futures to receive our entire technical outlook, actionable bias and proprietary levels by email each day.





Gold (April)


Yesterday’s close: Settled at 1668, up 25.00


Fundamentals: Gold is up by at least 1% again today as U.S Treasury yields fall precipitously. All in all, the Fed cut rates this week, U.S Treasury yields have reached record lows and a broader move by global central banks is becoming priced in. Not to mention, the odds for another 75 basis points worth of cuts by the Fed is becoming priced-in for their meeting in less than two weeks with a probability of 65%. Gold is pricing all of this in trading near 1700 and as the Dollar Index losses about 2% this week. Nonfarm Payroll is due eat 7:30 am CT and this number will have some impact on this price action but ultimately is likely to be drowned out, barring a large outside read from the 175k jobs expected and +0.3% for Average Hourly Earnings. Lastly, traders must keep in mind the potential reaction from Gold if equity markets made new lows.


Technicals: We remain unequivocally Bullish Gold over the long-term but advise traders to be somewhat cautiously bullish over the near-term and especially coming out of the weekend. There is strong overhead resistance at the previous spike high aligned with the next psychological century mark. For now, the bulls are in the complete driver’s seat above ...  Please sign up at Blue Line Futures to receive our entire technical outlook, actionable bias and proprietary levels by email each day.



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Futures trading involves substantial risk of loss and may not be suitable for all investors.