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E-mini S&P (December)

Yesterday’s close: Settled at 3532.75, up 59.50

NQ, yesterday’s close: Settled at 12,098.25, up 373.50

Fundamentals: U.S. benchmarks melted higher yesterday, with tech leading the way; NQ +3.19% and S&P +1.7%. We began to see a small divergence last night. Ahead of today’s bell the NQ is up nearly 1.0% and the Russell 2000 is down an equal amount. We noted here over the last two weeks that tech’s breather was only that; the market was gathering support and building a constructive base while small caps rallied. Furthermore, this was not the long called for rebalance out of growth and into value; the accustomed leadership will remain. We are not calling victory just yet but when behemoths Apple and Amazon surge higher on event headlines it certainly dictates who controls market narratives. Amazon’s two-day Prime Day begins today, and Apple launches its 5G iPhone 12.

Moving all these products are the transports. Bill Baruch joined CNBC’s Trading Nation yesterday to discuss his outlook on UPS and FedEx.

On the economic calendar, we look to September inflation data via U.S. CPI at 7:30 am CT. The Core read, excluding food and energy, is expected to come in at +1.8% YoY. Inflation is inching closer and closer to the Federal Reserve’s 2% target. In fact, their preferred gauge, the Core PCE index, came in at +1.6% for August. Yes, they plan to symmetrically let it run hot, but by how much? We are not concerned the Fed will tighten policy, but they could certainly exude less dovishness in the first quarter. One way to play rising inflation is by selling Treasuries; Bill Baruch joined CNBC’s Halftime Show last week to lay out a simple strategy to gain exposure to such.

Elsewhere, the banks kicked off third quarter earnings season. JPMorgan and Citigroup are both up by at least 1% after beating estimates. Johnson and Johnson also reported this morning. Although they beat expectations, the stock is down more than 1% after the company the Stage 3 trial of their Covid-19 vaccine. Bill Baruch joined CNBC's Trading Nation yesterday to discuss the healthcare sector.

Technicals: We will continue to hold our Bullish Bias, although cautiously. The S&P traded through key resistance levels to a high of 3541, shy of major three-star resistance at 368.75-3576.25. The NQ melted through major three-star resistance aligning with the round 12,000 mark and extended gains into the morning to a high of 12,249 which tagged key resistance at 12,225. The Pivots align with yesterday’s settlement and steady action above here is bullish. For the NQ, our rising momentum indicator is paired with settlement. Major three-star support in the NQ is ... Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias and proprietary indicators for the markets you trade, emailed each morning.

Crude Oil (November)

Yesterday’s close: Settled at 39.43, up 1.17

Fundamentals: Crude is snapping back steadily from a loss of nearly 3% yesterday after the IEA released their World Energy Outlook. Although the Paris-based company called for peak oil demand by 2030, citing an adoption to renewables and the decline of coal usage, the bubble-wrapped their prognosis with a near-term bullish outlook due to the global economy quickly recovering from the pandemic. A call that we can only assume to couple with massive central bank stimulus and ZIRP. OPEC will release their Monthly Report at 7:30 am CT.

Inventory data is due Thursday because of yesterday’s banking holiday in the U.S.

Technicals: A low of 39.04 yesterday held major three-star support perfectly at 39.05-39.22. Today’s rebound is well out above our momentum indicator at 39.68 and this coupled with a hold of major three-star support should continue to buoy the market. The halfway point from last week’s high and today’s low is 40.25, this will be a crucial mark that if Crude can close above should attract added buying. Still, the .618 aligns with unchanged on the week at 40.54-40.60 and also poses a headwind for Crude to again attempt a breakout above the 50-and-200-day moving averages as well as major three-star resistance at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias and proprietary indicators for the markets you trade, emailed each morning.

Gold (December)

Yesterday’s close: Settled at 1928.9, up 2.7

Fundamentals: Gold is holding ground tremendously and trading with the overall risk-environment which is buoyant at the least. The metal traded to a low of 1915.2, and saw early weakness take hold when the Chines Yuan opened lower last night. However, the Yuan strengthened slightly through the session and this brought support to commodities broadly. U.S. CPI is due at 7:30 am CT and although it is broadly important for the longer-term, Gold’s near to intermediate expectations are more tied to the risk environment and that of the Dollar’s path.

Technicals: Strong technical resistance at our major three-star level at 1933-1937

continues to keep a lid on rally attempts. Good news for the bull camp though as they won an early overnight battle at first key support at 1915-1917 and this lays a constructive groundwork for the metal. Our momentum indicator comes in at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and techincal outlook, actionable bias and proprietary indicators for the markets you trade, 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.

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