Morning Express | Actionable Macro Market Roadmap authored by Bill Baruch ahead of the Opening Bell
E-mini S&P (September)
Yesterday’s close: Settled at 3400.25, up 64.75
NQ, yesterday’s close: Settled at 11,392.75, up 332.25
Fundamentals: U.S. benchmarks snapped back yesterday after their three-day bludgeoning. Each major sector was broadly positive, but Travel and Airlines missed the trip. Disney and Netflix were also notably lower. Overall, the volume certainly lagged what we have seen in recent days and 28% of yesterday’s intraday E-mini S&P volume came during the final 30 minutes amid selling ahead of the bell as price action stalled at Friday’s settlement. The ECB monetary policy meeting is front and center this morning. All things considered, they left policy unchanged despite a Euro that has strengthened to as much as 1.20 and inflation indicators showing a contraction year over year. ECB President Lagarde is expected to make a note of the Euro’s recent action during her press conference that begins at 7:30 am CT. Furthermore, any noticeable remarks on inflation or the lack thereof will keep traders on the edge of their seats. We have pointed out in recent weeks, a potential reversion in the U.S. Dollar is one headwind for the stock market rally. From the U.S., Jobless Claims are due at 7:30 am CT and are expected to hit a post-pandemic low; 846,000 on Initial Claims while Continuing Claims slip below 13 million for the first time. PPI data is also due at that time, Wholesale Inventories follow at 9:00 am CT and 30-year Bond auction at noon.
Technicals: Yesterday’s one-sided tape, up until the close, went directly into major three-star resistance in the S&P at 3406.75-3417.50, a level that aligned the .382 on the recent move with Friday’s settlement. Whereas the S&P stuck its nose above here twice to a high of 3424.50, making it a difficult fade, the NQ failed to tag our next crucial 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 each morning. Crude Oil (October)
Yesterday’s close: Settled at 38.05, up 1.29
Fundamentals: Crude Oil is lower at the onset of U.S. hours. After the close yesterday, API posted a headline build of 2.97 mb of Crude. The tape has certainly taken notice although a large draw of 6.892 mb of Gasoline puts the composite in line with analysts’ expectations. If confirmed by the official EIA data though at 9:30 am CT, it will break a streak of six consecutive weeks of draws. A stretch, mind you, that price action finished last week lower upon. Official estimates are for -1.335 mb of Crude, -2.384 mb Gasoline and -0.557 mb Distillates. China is in the news today after announcing a narrative within its new five-year plan set to begin 2021 to increase commodity reserves. Specifically, crude, strategic metals and farm goods. The news does not seem to be moving the market much, however, on the other side of the coin, maybe its staving off what would otherwise be added weakness.
Technicals: After yesterday’s 2:00 am CT spike in Crude, price action was steadfastly above our momentum indicator which started the day at 36.95. This has now moved to 37.75 and price action this morning is below such mark. Above there comes key resistance at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning. Gold (December)
Yesterday’s close: Settled at 1954.9, up 11.7
Fundamentals: Gold is at one-week highs and feeding off Euro strength after the ECB said, “there is no reason to overact to Euro gains”. ECB President Lagarde did say they will monitor the FX rate and the Euro has moved from 1.18 pre-statement to 1.19 in the thick of her press conference. As for Gold, its strength is only in part due to Euro tailwinds today as it once again found a favorable technical landscape above $1900 early in the week and has also tracked risk-on sentiment amid the equity market rally from recent lows. U.S. Treasuries are lower on inaction from the ECB and as U.S. PPI data quietly came in much firmer than expected. Stronger inflation is a two-sided coin for Gold; typically, a lower reaction from the Treasury complex is coupled with Dollar strength, such that we are not seeing today due to the ECB. Lastly, although the Jobless Claims (Initial and Continuous) did not come in better than expected, they are lingering at or near the lowest levels since the onset of the pandemic.
Technicals: Gold is out above major three-star resistance at 1955.5-195 and testing into our next level of major three-star resistance at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.
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