Morning Express | Eurozone PMIs | Saudi Oil Exports| Gold, Silver, & the Fed | Technical Roadmap

E-mini S&P (September)

Yesterday’s close: Settled at 3380.75, up 8.00

NQ, yesterday’s close: Settled at 11,477.25, up 145.25

Fundamentals: The NQ closed at a fresh record yesterday, and the S&P battled to settle positive, 1% off its overnight low. This sounds like a healthy session, but not for anything other than tech behemoths. S&P Energy finished -2.13%, Financials -0.89%, Industrials -0.48%, Healthcare -0.29%, and Utilities -0.89%. In fact, all industries within the Consumer Discretionary sector were clobbered yesterday too, but Internet Retail, which is anchored by Amazon and covers nearly $3 trillion or 43% within the space, gained 1.05%. Tesla is not in the S&P but soared through $2000 for the first time at +6.56% for the day. The others followed, Facebook +2.44%, Microsoft +2.33%, Apple +2.22%, Alphabet +2.05% and Amazon +1.13%; these others account for more than a quarter of the S&P. Software was also hot with Adobe, Salesforce, and the gang flying high. The big keep getting bigger. U.S. benchmarks are lower this morning. Although we find yesterday’s poor breadth an underlying catalyst, another is centered around fear for the European economy. Flash PMI data from the Eurozone this morning expanded, but at a much slower pace than expected. Furthermore, a resurgence of Covid-19 infections has led analysts to anticipate a continued drag on the economy. European leaders have steadfastly rejected the notion of broad lockdowns. U.S. Flash PMIs are due at 8:45 am CT. Existing Home Sales follows at 9:00 am CT along with Eurozone Consumer Confidence.

Technicals: Yesterday’s tape was a bit surprising; we covered the poor breadth and behemoth leadership above. Regardless, the S&P grinded through key resistance levels before failing again, shy of its record high. We maintain that we feel the market is exhausted at these levels and overdue for a healthy 3-5% pullback. The S&P has major three-star resistance this morning at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed directly. Crude Oil (October)

Yesterday’s close: Settled at 42.82, down 0.29

Fundamentals: Crude Oil finished in the red but put together a healthy session. After losing 3.5% in early trading Thursday, price action ripped back to settle at session highs and near unchanged. One notable catalyst was data that showed Saudi Arabian exports fell to a record low level while their output reached a 17-year low, according to S&P Global. Another was the conclusion of the OPEC JMMC meeting that pointed to near 100% compliance now that overproducers must compensate for breaking the pact. Lastly, risk-assets across the board recovered steadily, led by tech stocks, and tailwinds were broad, however, energy stocks finished sharply lower.

Technicals: Rare major four-star resistance strikes again; Crude Oil stopped with a high of 42.96 before slipping. Price action is back below our momentum indicator at 42.67. This aligns with the continuous 200-day moving average to create our Pivot; below here the tape is heavy on the session as it nears a level of support in which it responded yesterday. This has been realigned to 41.63-41.87, but a break below here opens the door to ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed directly. Gold (December)

Yesterday’s close: Settled at 1946.5, down 23.8

Fundamentals: Bill Baruch will be joining the CNBC Halftime Show to discuss Silver at 11:45 am CT. The precious metals sector fell sharply early this morning and Gold hit a low of 1916.6 before paring all losses back to 1946.5. Volatility remains high, but this arguably is healthy as both Gold and Silver grabbed headlines and created an irrational exuberance in the near-term. We have said it for weeks, but a healthy consolidation at these levels and lower will lay the groundwork for Gold to $2300 and Silver above $30 by the first quarter of 2021, if not much sooner. The longer-term landscape has not changed, the Federal Reserve will remain accommodative and not look to raise rates until 2022. Furthermore, the virus is resurging in Europe. However, the Federal Reserve was reluctant to initiate new policies, in particular, yield curve control. This took some near-term winds out of Gold’s sails. Coupled with a sell the news event after the Buffett rally and a Dollar strengthening due to both aforementioned Europe and Fed reasoning, we find ourselves eyeing to buy Gold at lower levels.

Technicals: Gold responded to major three-star support at 1923-1931.6 yesterday but chewed through there briefly this morning as it neared out next wave of strong support at 1907.4-1909.6. Every level we have listed for Gold is a major three-star, because the uptrend is so definitive. Our momentum indicator aligns within our Pivot and continued action below here will leave the tape vulnerable to waves of selling in the near-term....  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed directly.

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