Morning Express | Actionable Proprietary Research and Levels for Commodities and Futures
E-mini S&P (December)
Yesterday’s close: Settled at 3393, up 53.75
NQ, yesterday’s close: Settled at 11,469.25, up 236
Fundamentals: U.S benchmarks are mixed, but firm. The S&P has stuck its nose above the 3400-mark, trading to the highest level since the September 16th FOMC meeting. Whereas the NQ is struggling to hold positive, the Russell 2000 small cap index is up nearly 1%. And trading at one-month highs. In fact, the Russell 2000 is 1% below its post pandemic high of 1605.70. Now, tech did bounce back from Friday’s bludgeoning, but broadly faces a thick area of technical resistance. At this point, it begs the question; is this a sector rotation or is this more of a grab for value, what has underperformed this year, as portfolio managers rebalance at the onset of quarter four, or is this what we saw in early August as tech pulled back relative to value before surging at an unthinkable pace to fresh records? We tend to believe the latter although we do expect added volatility through the completion of the election.
The upbeat price action this week comes on the heels of President Trump recovering from Covid-19 and progress on the fiscal front. Both narratives will be front and center and we do believe fresh fiscal measures coupled with an accommodative Federal Reserve will be the cornerstone to fresh record highs whether in happens before the end of the year or in the first quarter of next. Fed Chair Powell speaks at 9:40 am CT. Philadelphia Fed President Harker follows at 10:45 am CT and Dallas Fed President Kaplan is later at 5:00 pm CT; both are 2020 voters. ECB President Lagarde speaks this morning at 8:00 am CT. We continue to hold the belief that one of the only potential, yet major, headwinds for the market would be a strengthening U.S. Dollar. JOLTs Job Openings is at 9:00 am CT and there is a 3-year Note auction at noon CT.
Technicals: Price action in the S&P has extended gain while the NQ is lagging. However, each is holding decisively out above our momentum indicators at 3385 in the S&P and 11,423 in the NQ. Furthermore, the S&P has traded out above the 3397 resistance which we have denoted as the Pivot today. Resistance at in the NQ at .... Please sign up for a Free Trial at Blue Line Futures to have our entire techcnial outlook, actionable bias and proprietary levels emailed directly each morning.
Crude Oil (November)
Yesterday’s close: Settled at 39.22, up 2.17
Fundamentals: Crude Oil is up sharply again this morning, already achieving a gain of 10% this week. While risk-assets are broadly improving from Friday, the energy space has found tailwinds from Hurricane Delta which intensified to a Category 2 overnight. The storm is moving quickly toward Mexico’s Yucatan Peninsula before its expected to turn up the U.S. Gulf Coast later this week. Strikes from Nigeria and Norway oil workers have also lifted the complex. Still, traders must keep a pulse on the broad risk-landscape and the progress of fiscal stimulus in Washington. Early estimates for inventory data are very neutral.
Technicals: Price action has traded into a pocket of resistance that stalled previous rally attempts at 40.60-40.80, however, the move this week seems to be on a mission; one to not fade. The 200-day moving average for the November contract comes in today at 41.37; this level was only closed above August 25th and 26th; a close above here is bullish. Still, traders cannot ignore major three-star resistance at ... Please sign up for a Free Trial at Blue Line Futures to have our entire techcnial outlook, actionable bias and proprietary levels emailed directly each morning.
Yesterday’s close: Settled at 1920.1, up 12.5
Fundamentals: Gold continues its grind higher, capitalizing off U.S. Dollar weakness and ignoring rising Treasury yields. The metal is trading as a risk asset rather than a safe-haven and we are happy to steadfastly see this correlation. Why? Because we are bullish equities and yields through the end of the year and believe it is an environment that Gold will be able to capitalize on through the first quarter because the narrative is bubble-wrapped by a slow pandemic recovery and this is where Gold’s safe-haven attributes will shine long-term. Well, what now? We cannot ignore the strong overhead technical resistance and for those who bought the low with us at 1855, you should seriously consider locking in some profits. The week is about to pick up; Fed Chair Powell speaks at 9:40 am CT and is followed by a deluge of Fed speak today and into tomorrow’s FOMC Minutes from the September meeting at 1:00 pm CT.
Technicals: The tape is hovering just below a crucial level of technical resistance at 1933-1937 and we think this gives reason to lock in recent gains. The overnight low pinged support at 1907-1910 perfectly before responding with new swing highs. However, our momentum indicator is catching up with the tape at ... Please sign up for a Free Trial at Blue Line Futures to have our entire techcnial outlook, actionable bias and proprietary levels emailed directly each morning.
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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.