E-mini S&P (March)
Yesterday’s close: Settled 3272.50, down 5.75
Fundamentals: U.S benchmarks are sinking and to be blatant; this is no surprise. The Coronavirus death toll hit 170 and the number of confirmed cases in China has mounted to 7700. Russia has reportedly closed its border with China and travel bans are widening. We spoke on this to start the week; the incubation period is two weeks and the coming days and weeks would be crucial. Investors are taking chips off the table given the uncertain dent to global growth due to Coronavirus when coupled with a Federal Reserve who reiterated yesterday comfort with their current policy stance. The committee cut rates three times in the second half of 2019 and in December unleashed ample amounts of liquidity, of course the market reacted favorable to such policy maneuvers. There was no such reassurance yesterday. If you look back to before the cut in July, it was not uncommon for the market to trade lower without a dovish Fed. Given such weakness into the close, we were proactive at the trade desk encouraging short exposure just ahead of the electronic close in the Russell 2000; contact us at 312-278-0500 to understand how we are positioning.
We are in the heart of earnings season. Facebook is weighing on the tech sector and down 7% premarket despite topping estimates. Microsoft also reported after the bell and posted record sales. The stock is up nearly 4% premarket. Verizon, Northrop Grumman and Coca-Cola are among those reporting before the bell today. Amazon and Visa headline results after the bell.
The first look at Q4 GDP matched expectations at 2.1% although some of the components lagged.
Technicals: Price action yesterday stalled at major three-star resistance, covering the gap perfectly from Friday’s close in each the S&P and NQ, before turning lower ahead of the close. The S&P essentially retested the low of the week while the NQ still had nearly 1% to go. Given such, the S&P traded through the trend line from December 3rd during overnight hours. Will this happen intraday? If so, we expect this to open the door down to ... Please sign up FREE at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning.
Crude Oil (March)
Yesterday’s close: Settled at 53.13, down 0.15
Fundamentals: The energy sector is down sharply today as the Coronavirus spreads and travel bans mount. Furthermore, risk-sentiment broadly has taken a back step after yesterday’s Fed meeting and the inventory data was certainly not supportive amid this downtrend. Adding to the wall of worry are analysts racing to reduce estimates of Chine Oil demand this year. Lastly, Weekly Refinery Utilization in yesterday’s EIA report fell for the fifth straight week and at the highest pace (-3.3%) during that stretch.
Technicals: We continue to hold our near to intermediate-term bearish tilt, however, are very cautious given Crude previous inability to settle below 52.50 on a weekly basis. Therefore, this is not where you want to chase weakness, however, a failure at major three-star resistance at ... Please sign up FREE at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning.
Yesterday’s close: Settled at 1576, up 0.2
Fundamentals: Gold is edging higher amid a healthy backdrop for safe-havens; a weak close in equity markets, a Fed that did no support yields and mounting uncertainty before China reopens Monday. The headline read on U.S Q4 was in line with expectations but the internals left something to be desired. Gold has backed off the overnight high, a strong level of technical resistance, but if risk-sentiment continues to weakness we expect Gold to finish the session strongly. Chinese Manufacturing data for January is due tonight.
Technicals: We remain unequivocally Bullish in Bias Gold over the long-term and find the near-term move healthy. Still, we are cautiously optimistic from elevated levels given previous failures in this region (February Gold, which is falling off the board, is still trading at and only just above that August high). We find the bulls in the driver’s seat above ... Please sign up FREE at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning.
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