E-mini S&P (June)
Yesterday’s close: Settled at 3038, up 2.50 NQ, yesterday’s close: Settled
at 9460.25, up 27.75 Fundamentals: U.S. benchmarks have pared early losses ahead of the bell, though still lingering in negative territory. All eyes will be on the White House today and a three-pronged approach raising tensions with China. President Trump is expected to sign legislation passed by the House this week and Senate early this month placing sanctions on China and officials for inhumane acts on Uighur Muslims. The group has faced detention and torture in China’s Xinjiang province. The bill comes on the heels of the U.S. formally no longer acknowledging Hong Kong as autonomous and reiterating support for the anti-government protests. Thirdly, frictions are growing amid criticism of China’s handling of the Covid-19 outbreak. All of which jeopardize the lauded ‘Phase One’ trade deal. Still, markets are showing little regard toward the deteriorating geopolitical relationship and the ramifications to follow. Furthermore, toward the increasingly violent situation in Minneapolis-Saint Paul ahead of the weekend. It appears the Federal Reserve’s trillions upon trillions of stimuli is going to work just fine, keeping a bid under risk-assets. Growing corporate debt and the downgrades to follow have not deterred this bullish train. However, yesterday’s late weakness came as President Trump signed an executive order targeting social media companies; Twitter lost 4.45% and Facebook 1.61%. Overnight, Twitter placed its first warning on a President Trump tweet for “glorifying violence”. Please sign up for a Free Trial at Blue Line Future to have 1 or all 6 of our daily commodity reports emailed directly. The White House will not be the one grabbing headlines today as the economic calendar boasts Federal Reserve Chair Powell. He is expected to give a speech at 10:00 am CT. At 7:30 am CT, the Federal Reserve’s preferred inflation indicator the Core PCE Index is due. Data on Personal Spending, Income and Consumption accompanies the read. Chicago PMI follows at 8:45 am CT and final May Michigan Consumer data at 9:00. Technicals: We have held a cautiously Bullish Bias for much of this week, but cannot ahead of the weekend in regard to the fundamental uncertainties in today’s session that have yet to unfold and the technical struggles to close above major three-star resistances. The S&P stuck its head out above major three-star resistance at 3048.75-3052.75 for much of the session yesterday before late weakness settled it at 3038. The NQ broadly led the way yesterday after early weakness held support at 9327.25 and it spent a bulk of the session above major three-star resistance at 9500-9508 before settling at 9460.25. After the tape came in late yesterday, the S&P has spent the entire overnight session below our momentum indicator which aligns closely with settlement as our Pivot today at 3035-3038, below here the market is susceptible to waves of profit taking ahead of the weekend. The NQ, however, is above a similar alignment at 9441-9460.25 and the bulls are in the driver’s seat above here eyeing yesterday’s peak. We will keep 9500-9508 as a major three-star level due to its significance on a closing basis. To the downside, 9327 held early and quickly in the NQ, a level we said must hold in order to buoy the market, but a break below would drag things lower. Although we have kept it only as a two-star key level, it continues to hold significance upon new session lows and should be watched closely just as 3009-3012.50 in the S&P, a level that held the benchmark’s overnight lows. Please sign up for a Free Trial at Blue Line Future to have 1 or all 6 of our daily commodity reports emailed directly. Bias: Neutral Resistance: 3048.75-3052.75***, 3067.25**, 3091.50**, 3107-3109***, 3131**, 3169.75*** Pivot: 3035-3038 Support: 3009-3012.50**, 2999**, 2953-2965.50*** NQ (June) Resistance: 9500-9508***, 9565**, 9613.50**, 9644.75-9652.75***, 9754.25-9782.75***, 9843*** Pivot: 9441-9460.25 Support: 9381.25-9400**, 9327.50**, 9290**, 9172.50-9210***, 9096.50***
Crude Oil (July) Yesterday’s close: Settled at 33.71, up 0.90 Fundamentals: Several narratives continue to keep a bid under Crude Oil at the $30 mark. Although we find the complex exhausted at these levels both fundamentally and technically, Asia and OPEC continue to bring supportive tailwinds from Chinese imports to a decline in Shanghai floating storage and a drop in OPEC May production. Larger storage builds in the U.S yesterday were expected, just as the draw in Cushing was that offset sentiment. A deteriorating relationship between the U.S and China coupled with uncertainty that OPEC extends their pandemic cuts should bring a wave of weakness down to what has become a massive level of technical support below $30 and discussed more in the technical section below. Technicals: Price action recovered from the lows but is unenthusiastic being unable to regain first key resistance at 33.57-33.86. Our momentum indicator comes in at 33.15 and aligns with unchanged on the week eat 33.25; if it can chew through here, the door is then open to first key support which aligns with the overnight low. We maintain an opinion that this recovery which exceeded our expectations has run its course and the market profile must rebalance back at 29.36-29.52 at minimum but more likely rare major four-star support at $28. Please sign up for a Free Trial at Blue Line Future to have 1 or all 6 of our daily commodity reports emailed directly. Bias: Neutral/Bearish Resistance: 33.57-33.86**, 34.27*, 34.72-35.18****, 36.35***, 39.19***, 37.33-37.64***, 41.05-41.28**** Pivot: 33.15-33.25 Support: 32.36-32.51**, 31.35-31.56**, 30.25**, 29.36-29.52***, 28.00**** Gold (August) Yesterday’s close: Settled at 1728.3, up 1.5 Fundamentals: Gold is snapping back from yesterday’s second half weakness. Price action stalled at strong technical resistance that Bill Baruch covered in ‘What’s Moving’ as risk-on once again ran rampant through Gold’s settlement. However, as weakness in stocks began late in the session, the metal started to climb out of its hole, and this set the stage for gains into this morning. The economic calendar released the Fed’s preferred inflation indicator this morning, the Core PCE Index which was a tenth below expectations. Chicago PMI whiffed at 32.3 versus 40.0 and Michigan Consumer data was also softer. We now look to U.S China relations, President Trump and social media and Minneapolis-Saint Paul to drive headlines through the close. Also, Fed Chair Powell will be closely watched at 10:00 am CT. Technicals: Gold held major three-star support at 1725.5-1726.8 and we continue to be outright Bullish Bias. Silver’s latest bull-flag breakout keeps us excited for immediate-term upside. However, traders who are not yet positioned in Silver should be cautious as there is resistance at 18.50, though we believe it will chew through here. Gold has stuck its nose above 1744.5 and a close above here is very constructive on the week. The June Gold contract is not tradable, and the bullish August contract narrative began on a strong first step, one that we have been anticipating for weeks. Please sign up for a Free Trial at Blue Line Future to have 1 or all 6 of our daily commodity reports emailed directly. Bias: Bullish Resistance: 1744.5**, 1754.6-1755.6**, 1767-1770.1**, 1787.5-1788**** Support: 1725.5-1726.8***, 1720*, 1701.6****
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