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Morning Express | Blue Line Gear with Nonfarm Payroll Guess | Actionable Analysis by Bill Baruch


Tomorrow is Nonfarm Payroll, submit your guess on how many jobs were added in August to win your choice of a Blue Line Futures New Era hat or Nike golf shirt. The top three guesses will win.


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E-mini S&P (December)


Yesterday’s close: Settled at 3352, up 18.25


NQ, yesterday’s close: Settled at 11,407.25, up 69.50


Fundamentals: It is all about the stimulus; hopes of fresh fiscal measures out of Washington have brought a bullish tailwind to U.S. benchmarks. Despite lower price action after the presidential debate, House Speaker Pelosi renewed a glimmer of hope early yesterday ahead of a self-imposed deadline tomorrow. Mixed reviews of a meeting between U.S. Treasury Secretary Mnuchin and Pelosi yesterday jockeyed the tape upon the quarter-end close. Senate Majority Leader McConnell did not help adding that, “It’s safe to say the two sides are far apart.” The House postponed their vote on a $2.2 trillion Coronavirus aid bill set for today as the White House increased its counterproposal to more than $1.5 trillion. With the two sides converging, the market wants to believe a deal will get done.

Jobs are in focus with Nonfarm Payroll tomorrow and Jobless Claims this morning. Also, as both American Airlines and United Airlines plan to cut a combined 32,000 jobs. However, they are willing to hold back if Washington can come together and bring support to the airlines within a new fiscal package. Goldman Sachs is also in the news adding to planned job cuts. This comes on the heels of Disney and Shell yesterday.

Elsewhere on the economic calendar, we look to the Core PCE Index at 7:30 am CT. The Fed’s preferred inflation indicator is accompanied by Personal Spending and Income data. The final September Manufacturing PMI is due at 8:45 am CT and the more closely watched ISM Manufacturing follows at 9:00 am CT. Philadelphia Fed President Harker speaks at 8:30 am CT, New York Fed President Williams follows at 10:00 am CT, and San Francisco Fed President Bowman is at 2:00 pm CT. Traders should also continue to keep a pulse on comments out of Europe on Brexit, central bank policy, its relief fund and currency fluctuations; ECB Executive Board Member Lane speaks at 10:45 am CT.


Technicals: Price action continues to elevate, and we certainly do not advise against fading a move. We are intermediate and long-term Bullish in Bias, but see little value using leverage at these elevated levels given imminent fundamental uncertainties and overhead technical resistances. The NQ is running into our pocket of major three-star resistance at 11,539-11,571, a level it stalled at perfectly yesterday. The S&P is doing the same, running into major three-star resistance at 3379.50-3387; a level that it too failed at yesterday and one that aligns with the post-Fed gap. Keep in mind that we could see uplifting news throughout the day, but what matters is whether each index can close above their respective major three-star resistance levels. First key support in the S&P is ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed each morning.

Crude Oil (November)


Yesterday’s close: Settled at 40.22, up 0.93


Fundamentals: A drawdown of Crude stocks when a build was expected coupled with a firm day across risk-assets helped lift the tape from support and back above $40 for settlement. Despite yesterday’s strength, Crude Oil is down sharply this morning on continued fears that OPEC+ will bring more supply to the market in September than initially anticipated; on the heels of Russia’s data showing an uptick earlier in the week, data this morning signaled the same from Iraq. Today’s weakness feels a bit tough for the tape to shake off given that equity markets are doing the exact opposite ahead of the bell. Technical support levels below will be crucial today.


Technicals: Price action again failed at first key resistance at 40.30-40.51 and is now trading decisively below our momentum indicator at 39.79. This paves the way for a direct test to major three-star support at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed each morning.

Gold (December)


Yesterday’s close: Settled at 1895.5, down 7.7


Fundamentals: Gold held ground much better yesterday than Silver and has used a constructive landscape to capitalize into this morning on renewed hopes that Washington will pass a new Coronavirus relief bill before the weekend. If this narrative dissipates, so will today’s strength in Gold. Jobless Claims data was better across the board along with a firm read on the Core PCE Index. The Fed’s preferred inflation came in at 1.6%, above the 1.4% expected, as it edges closer to the Fed’s overall target of 2.0%. Although they will allow it to run hot and symmetrically above 2.0%, don’t think for a minute you won’t hear the conversation reinvigorated on a timeline to tighten policy ahead of 2023. Traders should keep a pulse on Silver and renewed weakness today will weigh on Gold. Crude Oil and Copper are two commodities getting tagged already this morning.

The final September Manufacturing PMI is due at 8:45 am CT and the more closely watched ISM Manufacturing follows at 9:00 am CT. Philadelphia Fed President Harker speaks at 8:30 am CT, New York Fed President Williams follows at 10:00 am CT, and San Francisco Fed President Bowman is at 2:00 pm CT. Traders should also continue to keep a pulse on comments out of Europe on Brexit, central bank policy, its relief fund and currency fluctuations; ECB Executive Board Member Lane speaks at 10:45 am CT.


Technicals: No one is screaming for Gold this morning, so we do not think you need to be exiting your winners, however, traders must be weary if the metal cannot close above 1901-1907 today. Additionally, our near-term upside target is ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed each morning.


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