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E-mini S&P (December)

Yesterday’s close: Settled at 3432.25, up 9.50

NQ, yesterday’s close: Settled at 11,660.75, up 10.50

Fundamentals: Stimulus developments in Washington are controlling risk-sentiment, but earnings and Chinese Yuan strength should not go unnoticed. U.S. benchmarks surged yesterday afternoon on upbeat comments from Senate Majority Leader McConnell in that a bipartisan deal is doable and the Senate would consider a larger price tag. However, that strength dissipated, and the tape finished on soft footing. Talks are set to continue today between U.S. Treasury Secretary Mnuchin and House Speaker Pelosi. Despite overnight strength, U.S. benchmarks are gyrating back to unchanged and the lower end of this week’s range. If a deal is reached, traders still want to exercise caution and be on the lookout for a buy the rumor, sell the news event. Our fear is associated with a watered-down version geared towards appeasing the headlines ahead of the election.

After failing to top its July high last week, Netflix is down more than 5% premarket on weak subscriber growth and an underwhelming fourth quarter outlook. Today’s deluge of earnings boasts fan favorites Snap and Tesla. Snap reported this morning and is up an eyepopping 22% ahead of the bell after a surprise beat. Among others to report before the open were portfolio bellwethers Abbot Labs, Verizon, and Thermo Fisher. All three topped expectations, but Thermo is the clear standout. Accompanying Tesla after the bell is Chipotle.

The Chinese Yuan strengthened overnight against the U.S. Dollar to the highest level since July 2018. With tailwinds from a strong Covid-19 recovery, hopes of a Biden win in two weeks, and strong Industrial Production data Saturday night, the move has certainly lifted the metals space. Copper hit the highest since June 2018 and Bill Baruch joined the CNBC Halftime Show to discuss his outlook.

Crude Oil has not garnered the same recent tailwinds from the Yuan as Copper, but it will be front and center at 9:30 am CT as the EIA releases weekly inventory data. Crude’s inflection point is discussed further in our Crude section. Elsewhere on today’s economic calendar, Fed Governor Brainard speaks at 7:45 am CT and Cleveland Fed President Mester, a 2020 voter, speaks at 9:00 am CT. Also, there is a 20-year Bond Auction at noon CT. This is a good time to remind traders of our bearish call on the Treasury space for the fourth quarter and the onset of 2021. Among many interviews where Bill Baruch discussed strategies and his outlook on Treasuries, the most concentrated was on CNBC’s Halftime Show two weeks ago.

Technicals: Upon two heavy waves of selling over the last two sessions, both the S&P and NQ have held crucial levels of technical support aligning with their breakouts on October 8th and 9th. This is major three-star support in the S&P 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 you trade emailed directly each morning.

Crude Oil (December)

Yesterday’s close: Settled at 41.70, up 0.64

Fundamentals: Crude Oil surged higher just ahead of settlement yesterday, joining risk-assets on upbeat stimulus prospects. Although strength across equity markets dissipated, Crude held ground post-settlement until API data underwhelmed. Although the report was not too negative and boasted a small build of 584,000 barrels versus small draw expectations, it was a reason for some wind to come out of the sails as price action joined other asset classes and failed at technical resistance. Still, Chinese Yuan strength, U.S. Dollar weakness, and reports of steady buying from China is keeping a bid under the tape in what is considered to be constructive groundwork at higher levels. EIA data is due today at 9:30 am CT and expectations are for -1.02 mb Crude, -1.829 mb Gasoline and -1.743 mb Distillates.

Technicals: Yesterday’s settlement was very constructive as it notched the 50-day moving average, a level we pointed out here that Crude has not settled above, but once by four cents, since the Labor Day fallout. Our rising momentum indicator at 41.23 this morning aligns with the 50-day at 41.20 to become a crucial Pivot, an inflection point, that Crude must continue to close out above. Still, there is strong overhead 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 for the markets you trade emailed directly each morning.

Gold (December)

Yesterday’s close: Settled at 1915.4, up 3.7

Fundamentals: Gold is trading at the highest level in a week on upbeat stimulus hopes and U.S. Dollar weakness. That Dollar weakness correlates with Chinese Yuan strength which has provided a formidable tailwind to the metals space. The Yuan and Copper are each trading at the highest level since mid-2018. Despite the enthusiasm across the sector, we still must see a bipartisan deal in Washington. Senate Majority Leader McConnell noted he was open to a higher price tag yesterday, U.S. Treasury Secretary Mnuchin and House Speaker Pelosi continue talks today, and White House Chief of Staff Meadows reiterated this morning his optimism for a deal in the next 48 hours. If we get a deal, traders still must be cautious for a buy the rumor, sell the news event given that Washington could laud a watered-down version in order to appease headlines while ultimately planning on further talks after the election.

Technicals: We are approaching the recent scene of the crime; major three-star resistance at 1933-1937. This level now also aligns perfectly with a trend line from the August 18th swing high. Yesterday’s settlement of 1915.4 held within resistance and that 1915-1917 pocket also holds our rising momentum indicator this morning; continue action above here is great, but a move below is very negative near-term. Silver also faces strong overhead 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 for the markets you trade 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.

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