E-mini S&P (September)
Yesterday’s close: Settled at 3387, up 7.25
NQ, yesterday’s close: Settled at 11,409.25, up 122.50
Fundamentals: U.S. benchmarks are steady ahead of the bell. After battling a very brief stint with volatility early yesterday, the S&P and NQ extended their ranges higher into the close. The S&P finished one quarter of a point below its all-time closing high from February 19th. Enthusiasm behind Democrats and Republicans in Washington piecing together a new round of fiscal measures helped stave off yesterday’s wave of selling. Comments from Treasury Secretary Mnuchin brought bullish tailwinds through the session. This morning, White House Chief of Staff Meadows said, “the prospects of a skinny deal are the best they’ve ever been, but we are still not there.” Developments through the end of the week will surely be market moving.
On the earnings front, Target and Lowe’s each reported blowout quarters. Target is up 8% premarket after announcing profits surged by 80% due to same-store sales when compared to last year. Lowe’s reported a 30% jump in revenue driven by e-commerce amid the ‘do it yourself’ narrative. The stock is up more than 2% this morning.
The Federal Reserve releases the Minutes from their latest meeting at 1:00 pm CT. With a 20-year auction set for noon CT (on the heels of last week’s record-setting 10-year and 30-year auctions), yield-curve targeting will be a hot topic and traders must keep an ear to the ground for further developments. Additionally, with deadlock dragging out in Washington, any signal of the Fed’s next move will be closely monitored.
Technicals: The path of least resistance remains higher, but whether there is exhaustion is questionable. We tend to believe the latest leg has run its course as the S&P and NQ face pivotal levels of technical resistance, but pullbacks that we would have imagined to be slightly deeper were bought steadfastly. For the S&P it's all-time closing high at 3387.50 aligns with our momentum indicator this morning as our Pivot. Major three-star resistance overhead aligns with its record at 3397.50. The NQ settled at our next extended area of resistance at 11,400-11,408. The tape is waffling at these areas ahead of the bell. To the downside, yesterday’s weakness in the NQ played perfectly into our major three-star support. Whereas the S&P traded into a rather wide pocket that has incurred steady volume, major three-star support is now not only created with that low, but it is now exactly the .382 from the freshly set swing high down to the August 11th low. This brings a line in the sand, and a move below these supports will encourage added selling.
Resistance: 3397.50-3400***, 3438.50***
Support: 3379-3382.50**, 3365.25***, 3356-3356.75**, 3347.50-3350**, 3326.75-3330***
Resistance: 11,400-11,408***, 11,502***, 11,721***
Support: 11,325-11,347**, 11,261-11,283***, 11,187**, 11,100-11,133**, 11,055**, 10,975-11,000***
Crude Oil (October)
Yesterdays’ close: Settled at 43.12, down 0.05
Fundamentals: Crude Oil continues to battle against its March 6th closing price. For the October contract, this is 42.92. Buoying the tape is a continued drawdown of U.S. inventories. Last night, the private API survey said stocks fell by 4.29 mb, more than the 2.67 mb expected from the official EIA report today. However, a build in Gasoline of 4.991 mb offset the potential enthusiasm. Analysts expect -0.557 mb Gasoline and -1.986 mb Distillates. U.S. production will be closely watched; it was estimated to fall by 300,000 bpd the week ending August 7th. The JMMC for OPEC is meeting today to discuss policy and strong compliance, however, no changes are expected.
Technicals: Crude Oil settled higher yesterday at 43.12 and above 42.92, but still not decisively. The continuous 200-day moving average is now bringing support on a closing basis at 42.37 and the October 200-day moving average is edging lower at 43.52. Critical levels are converging, and a directional move should be expected soon enough. We want to be buyers from lower levels.
Resistance: 42.92****, 43.52***, 46.37***
Support: 42.37**, 41.75-41.87**, 41.33-41.49**, 40.00-40.24**, 38.77-39.00**
Yesterday’s close: Settled at 2013.1, up 14.4
Fundamentals: Gold is lower today and some of those tailwinds from the Buffett news are dissipating. However, within the metals space Copper is trading at the highest level since June 2018 on falling Chinese output. Whereas the weaker U.S. Dollar is lifting commodity prices across the board, it is showing signs of wanting to stabilize ahead of today’s FOMC Minutes as talks of new fiscal measures in Washington progress. Whereas we are unequivocally long-term bullish Gold, we are much-less enthusiastic in the immediate-term.
Technicals: Gold’s breakdown point from one week ago proved to be enough to stop the near-term strength. Yesterday’s rally created strong major three-star support at 1967.1, this aligns with a previous resistance shelf through late last week. We would like to view that area as a buy pocket and imagine it getting tested over the next 24 hours as long as it stays below our momentum indicator which now aligns with the 2004-2007.7 pocket.
Resistance: 2020-2028**, 2054-2061***, 2071-2072.5***, 2090.6**
Support: 1981.7-1985.2**, 1867.1***, 1955.2-1957.7**, 1949.4***
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Blue Line Futures
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.