Morning Express | Actionable Proprietary Research and Levels for Commodities and Futures
E-mini S&P (December)
Yesterday’s close: Settled at 3406.75, up 53.50
NQ, yesterday’s close: Settled at 11,470, up 196.25
Fundamentals: U.S. benchmarks are continuing yesterday’s strength in a snapback from Tuesday’s selling. The wave of weakness followed President Trump’s tweets on fiscal policy negotiations. In fact, it was his follow up tweet late Tuesday night, that we pointed to here yesterday, where he emphasized his willingness to pass a ‘Stand Alone Bill’ for $1,200 stimulus checks to individuals that reinvigorated strength across risk-assets. That strength has continued to carry the tape higher and ultimately the market realizes a Coronavirus aid package is coming. With no surprise, yesterday’s FOMC Minutes reiterated the need for fiscal measures. The market finished strongly after the release as it echoes its anticipation of support. Whether piece by piece or one bill, before the election or after, support is coming.
Yesterday, NY Fed President Williams took a less dovish and arguably hawkish approach. He said that although the economic outlook is still uncertain and the recovery is not where it needs to be the Fed is already very accommodative, buying bonds at “extremely high levels”. Quietly, those comments are a shot at Congress for help. He added that the committee will not accept “persistently high inflation”. The market is not worried the Fed will take away the Kool-Aid anytime soon (and expects additional stimulus from Congress), however, we expect these types of narratives to come to a headwind in the first quarter. Not because the Fed will raise rates in 2021, but because the timeline from 2023 will likely be bumped up.
Weekly Jobless Claims were solid this morning. Initial Claims were a touch above expectations at 840,000 whereas Continuing Claims set a new post-pandemic low. There is a 30-year auction at noon CT.
Technicals: The S&P is at one-month highs and testing major three-star resistance at 3431.75, whereas the NQ has now recovered all losses from last week and is also trading into major three-star resistance at 11,539-11,574. A close above here for each paints a path higher; in the S&P this is ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets of your choice emailed each morning.
Crude Oil (November)
Yesterday’s close: Settled at 39.95, down 0.72
Fundamentals: It is risk-on across the board and everything is higher; stocks, energies, metals and agricultures. Although Crude Oil lost nearly 2% yesterday, it recovered well from selling post-settlement on Tuesday and overall achieved a solid session despite a larger headline build of Crude Oil, more estimated production coming online and a downgrade of Hurricane Delta. Overall, Crude has ignored the uptick in Covid-19 outbreaks and the potential escalation of restrictions or lockdowns. Instead, it seems to be more focused on the broad risk-on move in anticipation of fiscal policy and outages in Norway and Nigeria. Analysts expect to 1 mbpd in Norway to come offline due to a labor dispute.
Technicals: The surge in Crude Oil today has cleared key resistance at 40.60-40.80, a level that has deflected recent rally attempts. Price actin is closing in on the 200-day moving average at 41.20. Remember, the 50-day moving average is at 41.10 and a move higher would encourage the Golden Cross. Overall, a close above ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets of your choice emailed each morning.
Yesterday’s close: Settled at 1890.8, down 18.0
Fundamentals: Gold is up firmly today, and tracking risk-assets higher even thought the U.S. Dollar is holding ground. The recovery from the recent wave of weakness speaks volumes to Gold’s intermediate to longer-term strength. Overall, the economic recovery is weak, and inflation is beginning to show up and this paints a path of least resistance higher as markets anticipate added stimulus. Still, traders cannot ignore technical resistance levels amid a very tradable landscape and the seasonally softer time of year.
Technicals: The tape has moved out above our momentum indicator which comes in at 1892 and must hold above here for a constructive recovery from weakness earlier in the week. Still, major three-star resistance 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 for the markets of your choice emailed 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.