E-mini S&P (September)
Yesterday’s close: Settled at 3098, down 9.00
NQ, yesterday’s close: Settled at 9983, flat
Fundamentals: June futures and options expire at 8:30 am CT. Options on securities expire at the close. Quadruple witching typically brings volatility in its aftermath as positions are unwound. Ahead of the Federal Reserve meeting last week, we called for this date to bring a cleansing. Last Thursday’s volatility helped speed the process up, but as this expiration passes and quarterly rebalancing approaches, we still expect there to be added two-way volatility and advise traders to be vigilant for sharp selloffs upon such repositioning and unwinding.
U.S. benchmarks are pointing higher ahead of the open and European hours again buoyed the tape. Central bankers have been and continue to be front and center. Boston Fed President Rosengren leads things off at 9:15 am CT, followed by Fed Governor Quarles at 11:00 and Fed Chair Powell at noon along with Cleveland Fed President Mester. Powell and Mester (a 2020 voter) have already made the rounds this week, but market participants will look key off any comments on the heels of fresh data this week.
The EU Summit is also grabbing headlines as leaders laid out a timeline to approve the lauded 750-billion Euro stimulus package, giving themselves another month. The deal, supported by Germany and France, would solidify the bloc behind a budget and what is anticipated to be 500-billion Euros worth of grants for the hardest hit nations. ECB President Lagarde warned of a negative impact if the deal fell through. Like Fed Chair Powell, central bank leaders have been steadfastly calling for fiscal measures to keep economies afloat in the aftermath of the Covid-19 pandemic.
Commodities and stocks are getting bid after China reportedly told state-owned agriculture buyers to attempt to meet the lauded Phase-One trade deal quotas. This is bullish and taken as a sign that U.S-China relations have not deteriorated much despite the political jawboning.
Yesterday, the tech sector, led by Microsoft, Salesforce and Oracle, helped bring the tape off early lows. Consumer Defensive and Energy also posted solid sessions. Energy is a leader again today with the XLE +2% premarket after OPEC reassured markets of compliance through July.
Technicals: We have held a cautiously Bullish Bias through the week and yesterday pointed to a bull-flag setup if major three-star support at 3062-3072.25 held. This is exactly what we are seeing at the onset of U.S. hours with the S&P laying extensive groundwork for the pattern to play out and the NQ remaining elevated relative to recent ranges the entire week. Furthermore, Crude Oil has a similar positioning pattern playing out that opens the door to a test of 42.33 and both risk-assets would feed on each other upon such. While the NQ is chewing through major three-star resistance at last Wednesday’s gap settlement at 10,073.25, the S&P is eyeing the same mark and this brings a bullseye to ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emaiiled directly each morning.
Crude Oil (August)
Yesterday’s close: Settled at 39.05, up 0.80
Fundamentals: Commodity prices are moving higher today, and Crude Oil is leading the way. Comments from OPEC+ on strong compliance and upbeat tailwinds behind U.S-China trade have lifted risk-assets at the onset of U.S hours. Iraq has been the largest elephant in the room when it comes to compliance and reports that OPEC+ will compensate them to cut production has brought bullish tailwinds. Baker Hughes Rig Count data is due at noon CT. Some backwardation is taking place in Brent and this could help bring a sell the rally play.
Technicals: Price action is out above last Wednesday’s gap close and the tape is bullish above ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emaiiled directly each morning.
Yesterday’s close: Settled at 1731.1, down 4.5
Fundamentals: Gold is rotating back north this morning in a constructive technical pattern. Still, the metal needs a catalyst to breakout of its consolidation range. The Federal Reserve continues to be front and center. Boston Fed President Rosengren leads things off at 9:15 am CT, followed by Fed Governor Quarles at 11:00 and Fed Chair Powell at noon along with Cleveland Fed President Mester. Powell and Mester (a 2020 voter) have already made the rounds this week, but market participants will look key off any comments on the heels of fresh data this week. Commodities in general began a firm move early this morning on an upbeat reports on U.S and China relations, strengthening the Yuan. The Dollar and Treasuries have also weakened broadly in the risk-on move. Instead, Gold is keying off strength in commodities and Silver.
Technicals: Price action in Gold has regained out above a critical marker at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emaiiled directly each morning.
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