• Bill Baruch

Morning Express


E-mini S&P (June) Yesterday’s close: Settled at 2858.25, up 33.00 Fundamentals: U.S benchmarks are firm this morning, regaining highs from yesterday after a soft final hour. Tech and Healthcare have been leaders from the March lows and yesterday was no different. The NQ gained 1.5%, but it was Healthcare that allowed the S&P to keep pace; the XLV ETF gained 2.17%. It is no secret that the market has been broadly strong but lacks the internals to get investors excited. After an exacerbated move to the downside in March amid pricing in zero demand, the recovery has felt more or less a daily momentum battle; the market sails in a direction, it either gathers whatever tailwind or quickly stalls before trying a new direction. The fundamentals have not changed, the economic data is dismal, there is no forward guidance, but the Fed and other central banks have launched unprecedented stimulus measures. There is hope in restarting the economy and this seems to have carried some of the latest strength (last two weeks). Crude Oil has recovered well during this time and working to buoy risk-sentiment. Yesterday, President Trump spoke about normalization and acknowledged that many will be affected badly while emphasizing the economy must be reopened. There is evidence of an uptick in infections for those countries around the world that have begun easing restrictions. Disney reported yesterday evening and the stock is down 2% ahead of the bell. Bill Baruch joined CNBC’s Trading Nation to discuss where he would be a buyer. We noted the dismal economic data above. Today, March German Factory Orders plunged 15.6% versus -10% expected. The worst level since 1975 and 1976. March Eurozone Retail Sales fell 11.2%, worse than the -10.5% expected. U.K Construction PMI was 8.2 versus 22 expected. If one is digging deeply to find a positive narrative, Services data beginning with April ISM Non-Manufacturing yesterday was not as bad as feared at 41.8 versus 36.8 expected, although this deep contraction is still the worst since 2008. Today, Eurozone Services PMI was a bleak 12.0. Although the final read for April is a record low, it was better than the 11.7 preliminary. The private ADP Payroll survey is due at 7:15 am CT and is expected to show 20.05 million jobs lost in April. This comes ahead of the closely watched Nonfarm Payroll report Friday which will give us the first look at the unemployment rate expected at 16%. With all of this said, the market is severely underpricing in a new chapter in the U.S-China trade war. Technicals: Price action has been firm and trading above our momentum indicators in each the S&P in NQ. However, strong overhead resistance looms. For the S&P this has been a battleground level at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly. Crude Oil (July) Yesterday’s close: Settled at 26.49, up 3.71 Fundamentals: Crude Oil stretched higher last night but has since begun to come in. We have been extremely patient in Bias here, standing Neutral since the tape came off our only major three-star support at 17.12-17.29. Our patience has allowed us to feel comfortable now reintroducing a cautiously Bearish Bias at these elevated levels. Inventory data is in the picture today. The private API survey posted +8.44 mb Crude, -2.237 mb Gasoline, +6.143 mb Distillates and +2.681 at Cushing. This less severe build in inventories coupled with analysts revising estimates lower for the official EIA report at 9:30 am CT helped lift price action over the last 12-24 hours. Today’s estimates are +7.759 mb Crude, +0.043 mb Gasoline and +2.9 mb Distillates. Cushing and production levels will be watched closely, and traders must keep a pulse on broad risk-sentiment.

Technicals: Price action settled at major three-star resistance at 26.28-26.39 and overnight extended to test our next resistance level, a major three-star, at 28.14-28.46 before failing. Our momentum indicator comes in at 26.19, and we believe the tape to be contained with momentum shifting to over-extended while below here which encourages an opportunity for the bears to take the driver’s seat. Major three-star support, our downside targer, comes in at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly. Gold (June) Yesterday’s close: Settled at 1710.6, down 2.7 Fundamentals: Gold is taking it on the chin this morning. Treasury yields are sharply higher as record supply comes down the pipeline. Coupled with a stronger Dollar and continued disappoint from Silver, the sellers are trying to hold an edge today. Weak data from Europe and a record drop in ADP Payrolls, as expected, is not enough to stave off the waves of selling. Today, technical levels of support are of the utmost importance for Gold and holding ground will pave the way for construction.


Technicals: We began taking a more cautious near-term approach last week but remain unequivocally Bullish long-term. Gold has decisively cut through major three-star support at 1700.9, a level that was more of a marker in bringing life to strength that began late last week. Below here, the door is open for weakness to support at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.


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