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E-mini S&P (December)

Yesterday’s close: Settled at 3462.25, down 13.25 on Friday and 11.00 on the week

NQ, yesterday’s close: Settled at 11,798, down 76.00 on Friday and up 73.25 on the week

Fundamentals: U.S. benchmarks are regaining their late Friday losses on renewed stimulus hopes and strong technical groundwork. The on again, off again Coronavirus Aid talks in Washington have taken a positive turn. House Speaker Pelosi said she is “optimistic” that a deal can be reached ahead of the election. White House Chief of Staff Meadows added this morning that he spoke with the President on Sunday for an hour, welcomes Pelosi’s tone and is he is hopeful that an agreement can be reached in the next 48 hours. Fiscal stimulus ahead of the election is certainly a bonus and will bring a welcome tailwind to the market. However, one that falls short of expectations could bring added volatility unless it is bubble-wrapped with the promise of more soon.

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Economic data out of China last night was mixed. Although Industrial Production firmly topped expectations at 6.9% versus 5.8% YoY, Q3 GDP missed at 4.9% versus 5.2% YoY and 2.7% versus 3.2% QoQ.

Central bankers crowd today’s schedule with Fed Chair Powell headlining an IMF event and speaking this morning. ECB President Lagarde speaks at 7:45 am CT, along with Executive Board Member Lane. NY Fed President Williams speaks at 8:00 am CT and Vice Chair Clarida is on deck speaking at 10:45 am CT. Atlanta Fed President Bostic and Philadelphia Fed President Harker speak later at 1:20 pm CT and 2:00 pm CT; Bostic is a 2021 voter and Harker a 2020 voter.

Traders also want to keep an eye on a positive turn amid Brexit talks and an OPEC+ technical meeting; both have the power to sway risk-sentiment.

Technicals: Last week, we discussed the tremendous technical groundwork, specifically citing the bullish Inverse Head and Shoulders pattern within the S&P. Last week’s strength then settled in through Thursday and Friday in what has so far proven to be a healthy consolidation and hold of technical supports. Such has created a bullish Cup and Handle pattern in each the S&P and NQ. Despite weakness in the final hour Friday, the close at session lows creates a formidable support level given that overnight strength ahead of today’s open has left a gap. This is major three-star support in the S&P at 3462.25 and for the NQ at 11,764-11,792. A hold of these levels upon a retest and furthermore, a constructive start to the session at and above our Pivots which align with our momentum indicators will encourage buying into the close.

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Bias: Neutral/Bullish

Resistance: 3494**, 3508.50**, 3524.75**, 3532.75***, 3541**, 3568.75-3576.25***, 3587***

Pivot: 3486

Support: 3462.25***, 3455.75**, 3448.50*, 3431.75-3437.50***, 3406.75-3410***, 3369.50**, 3353.25***, 3329-3330.50***

NQ (December)

Resistance: 11,950-11,974***, 12,094**, 12,225-11,249***, 12,397-12,465***

Pivot: 11,860-11,907

Support: 11,764-11,792***, 11,724-11,736**, 11,539-11,574***, 11,454**, 11,266-11,273***, 11,167-11,197**

Crude Oil (December)

Last week’s close: Settled at 41.12, down 0.12 on Friday and up 0.21 on the week

Fundamentals: Crude Oil is holding ground well given its inability to technically breakout, yet. However, tailwinds from an OPEC+ technical meeting, strong Chinese demand and a supportive EIA report late last week have kept a bid under dips. OPEC+ is scheduled to add 2 mbpd to the market in January as production restraints are lifted. The resurgence in virus cases has renewed demand fears which could prolong OPEC’s normalization of production. However, the main topic is expected to be compliance. Strong commodity demand out of China and a better than expected read on September Industrial Production last night is certainly a positive for the market although Q3 GDP was lighter than expected. Renewed stimulus hopes in Washington is also bringing a tailwind to risk-assets to start the week, traders must keep a pulse on this narrative.

Technicals: Since closing below the 50-day moving average on September 4th, Crude Oil has struggled to regain and close out above the level, only doing so on October 8th and by four cents. The 50-day has clearly broken out above the 200-day, but we must see price action agree by closing above such. Furthermore, major three-star resistance at 41.50-41.74 has brought tremendous headwind. To the downside, pullbacks have been constructive, and the overnight low held support at 40.40. Our momentum indicator comes in at 40.77 and aligns with the 200-day as our Pivot; continued action above here is healthy.

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Bias: Neutral/Bullish

Resistance: 41.25**, 41.50-41.74***, 42.02**, 43.56-44.33****

Pivot: 40.77-40.87

Support: 40.40**, 39.33-39.36***, 38.76**, 38.06*, 36.93-37.06****, 34.82***

Gold (December)

Last week’s close: Settled at 1906.4, down 2.5 on Friday and 19.8 on the week

Fundamentals: Gold surged higher in the early hours this morning on renewed stimulus hopes and a strong Chinese Yuan. Both of which equal U.S. Dollar weakness. However, Treasuries are also lower, and this could be encouraging Gold’s rally to stall out once again in front of strong technical resistance. There is a long lineup of central bankers today at an IMF event and Fed Chair Powell did not make any major comments on monetary policy, instead making headlines on digital currencies. Regardless, continued weakness in the U.S. Dollar paves a constructive path for Gold.

Technicals: Gold stuck its nose above first key resistance and failed at second key resistance. Overhead, our third level, major three-star resistance at 1933-1937 has kept a lid on rally attempts. Given the swings in the last two trading session our momentum indicator has been flat at 1909; continued action above here is constructive. However, continue action below 1909 and a break below major three-star support at 1902-1905 is near-term negative.

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Bias: Neutral/Bullish

Resistance: 1915-1917**, 1925*, 1933-1937***, 1950-1958***

Pivot: 1909

Support: 1902-1905***, 1877.1-1880***, 1866.3*, 1851**, 1845.4****, 1829.8***

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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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