E-mini S&P (June)
Last week’s close: Settled at 2482.75, down 33.75 on Friday and down 41.25 on the week
Fundamentals: U.S benchmarks have roared higher to start the week on reports new infections are leveling off and speculation an “apex” is upon us. On the heels of a dismal jobs report Friday and historically mounting unemployment claims, President Trump said Sunday there is “light at the end of the tunnel”. New York is the epicenter of the virus here in the U.S and Governor Cuomo was also leaning this direction noting the number of deaths in New York has dropped in recent days. He said Sunday, “the data could be near the apex and the apex could be a plateau, we could be on that plateau now but won’t know for a few more days.” The Surgeon General Adams was singing a different tune, calling for the week ahead to be the saddest of most Americans’ lives even comparing it to Peral Harbor and 9/11. The market is certainly responding to the former comments, however, is overlooking the economic ruin left behind. Yes, Europe is considered to be a week or two ahead of the U.S and there is reason to believe cases are leveling off in some of the hardest hit regions [Italy and Spain]. At the same time, the ensuing stress left on businesses and communities is yet to be known. JP Morgan CEO Jamie Dimon said the slowdown will include a recession with financial stress like the global financial crisis in 2008. JP Morgan and the banks kickoff Q1 earnings season next week but remember Q2 will be the hardest hit and this leaves ongoing uncertainties.
Technicals: The tape is up sharply, and the bulls are back in the near-term driver’s seat. Although there are strong resistance levels overhead, the bulls hold this edge on the session while price action is out above first key support levels. Just as important as those supports are our Pivots. For the S&P this is previous resistance aligning with a gap at 2558.75-2569.75 and for the NQ a similar level at 7445-7558.50. There is no doubt he bulls have that edge in achieving a retest to the closely watched major three-star resistance in the S&P at 2641.50, the widely known .382, and previous peak at 2635.75. For the NQ, its peak aligns closely with the round 8000. Our momentum indicators are of course lagging such strength, and this gives the bulls flexibility in holding an edge down to 2529.50-2530.25 in the S&P and 7660-7686. These are previous peaks and levels in which price action failed to trade through last week, but the bulls must respond on a retest or face a quick failure. We believe the market to be very vulnerable technically, but for the time being one that has reinvigorated a bit of FOMO despite ongoing fundamental uncertainties. We will continue to hold a cautiously Bearish Bias until a close above 2635.75-2641.50 in the S&P.
Resistance: 2588.25**, 2635.75-2641.50***, 2729-2785****
Support: 2529.50-2530.25**, 2505.25-2511.25**, 2482.75***, 2445-2459.25*** NQ (June)
Resistance: 7884-7892.50**, 7995***, 8140**, 8205-8233***
Support: 7660-7686**, 7509-7522.75***, 7404.25-7438.75***, 7365-7376**, 7292.75-7311.75***
Crude Oil (May)
Last week’s close: Settled at 28.34, up 3.02 on Friday and up 6.83 on the week
Fundamentals: Crude Oil gained a historic 31.7% last week. No one wanted to be short going into the weekend on hopes President Trump was orchestrating one of his greatest deals; a united OPEC+ and North American production cut. Those far-fetched hopes quickly dissipated over the weekend after news of a renewed rift between Saudi Arabia and Russia. The virtual meeting for today was postponed until Thursday and furthermore, it became largely known that President Trump’s influence on private U.S Oil and Gas firms is limited, yielding very little in his highly touted face to face meetings at the White House Friday. However, he can impose tariffs on Saudi Oil if no agreement is reached later this week. In an interesting twist, Saudi Arabia has postponed pricing on May Crude deliveries until after the OPEC meeting; this echoes similarities to the first week of March. Is Crude Oil pricing in the risks properly at these levels? It opened lower last night but has been buoyed by the broader risk-environment due to a potential plateau in virus cases coupled with the likeliness of some action by OPEC+ later this week. For now, we still lean on a ‘buy the rumor, sell the new’ event.
Please sign up at Blue Line Furures to have 1 or all 6 of our daily futures and commodities resaerch emailed directly. Technicals: Price action surged to a high of 29.13 Friday and tested the thick of our major three-star resistance at 28.61-29.00. After settling at the highs, it opened last night at $26 and traded down to 25.28. We have major three-star support at 24.97-25.36, aligning multiple indicators and the .382 retracement back to the 19.27 low from Friday’s high. This level will bring a line in the sand on the week and although the bears are not in the clear below here with still strong support at 23.36-23.52, it would almost completely negate Friday’s rally. However, a close above 28.61-29.00 and furthermore 30.25 is near-term bullish.
Resistance: 28.61-29.00***, 30.25***
Support: 26.27*, 24.97-25.36***, 24.20**, 23.36-23.52*** Gold (June)
Yesterday’s close: Settled at 1645.7, up 8.0 on Friday and down 8.4 on the week
Fundamentals: Gold achieved a lot last week, staving off heavy waves of selling to finish on a strong note. Its time is now, after historic measures by the Federal Reserve and Washington, a stable Crude Oil market should not be overlooked as it brings a tailwind to inflation expectations. Gold has also traded higher along with the Dollar which is acting as another barometer of safe-haven demand. Despite a stable risk-environment upon a surge in equity markets to start the week, the economic fallout is still largely unknown, and that unknown coupled with those aforementioned historic measures is a recipe for the next bull leg in Gold.
Please sign up at Blue Line Furures to have 1 or all 6 of our daily futures and commodities resaerch emailed directly. Technicals: Gold did not settle above 1651.4 on Friday but its trading handedly above there this morning and further sticking its nose above resistance at 1669-1673.6. We like Gold’s roadmap of recovery last week very much and believe the technical landscape to be very ripe for its next bull leg. We discussed here Friday the bullish inverse head and shoulders and how it would bring a massive tailwind of buying upon a move through 1700. Still, Silver needs to join the party and a close above $15 is needed.
Resistance: 1669-1673.6**, 1691.7-1700****
Support: 1638**, 1622.7**, 1602.3-1605***, 1591.4**, 1575.5-1575.9**, 1546.6-1551.5**
Sign up for 1 or all 6 of our daily Blue Line Express commodity reports!
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.