E-mini S&P (September)
Yesterday’s close: Settled at 3443, up 15.50
NQ, yesterday’s close: Settled at 11,726.25, up 90.00
Fundamentals: U.S. benchmarks are holding steady ahead of the open and Salesforce reported a blowout quarter. The S&P is clinging to its record-breaking start to the week with Fed Chair Powell’s keynote speech tomorrow at Jackson Hole in focus. Talks between the U.S. and China have added a tailwind to accompany the FDA’s approval of Convalescent Plasma as a treatment for COvid-19. The two world powers have lauded progress on Crude Oil and Soybean purchases in a sign that all has not been lost after cancelling a scheduled meeting a week and half ago to evaluate the Phase One trade deal.
It is a big week for the newly announced Dow Jones inductee Salesforce. The company’s stock is up 14% premarket after they reported adjusted earnings of $1.44 per share versus $0.67 expected by analysts and $5.15 billion in Revenue versus $4.90 billion. The company’s investments boosted earnings for the quarter and watered-down the impact of softer guidance for Q3. Tagging along are the usual suspects, Apple and Microsoft, who are each up about 1% in afterhours trading, helping to hold the NQ in positive territory.
Durable Goods are due at 7:30 am CT. On the energy front, weekly EIA inventory data will be in focus as Hurricane Laura strengthened to a Category 4 and makes landfall later today. There is a fear the damage could keep some production shutdown for months. The data is expected to print the fifth straight weekly drawdown of Crude inventories as of last week. Crude Oil is trading at the highest level since March 6th, coupled with the August 5th spike. The energy sector as a whole, however, has underperformed this week given the lost production and uncertain timelines.
Technicals: Since Monday’s breakout, the S&P has been overall contained by our next major three-star resistance level at 3438.50-3446.75. The NQ nudged through major three-star resistance at 11,721 yesterday with a settlement of 11,726. The index and has now extended its range higher overnight to 11,784, but we still find this resistance crucial until a more decisive close out above. Our momentum indicators are rising and have nearly caught up with the tape 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.
Crude Oil (October)
Yesterday’s close: Settled at 43.35, up 0.73
Fundamentals: Despite several bullish tailwinds, Crude Oil has still struggled to clear two significant technical hurdles (discussed in the Technical section below). Hurricane Laura is expected to make landfall later today and the impact, according to Bloomberg, could tally $18 billion worth of damages while keeping refineries shutdown for months. As we have mentioned though, there are two sides to the coin. The damages could quickly lead to less demand in the area and from refineries who process Crude Oil into products; essentially stockpiling unused Crude Oil. Whereas Crude Oil is still contained within the high from August 5th and the March 6th settlement, Gasoline extended a breakout tapping the March 6th high. Bill Baruch joined CNBC’s Fast Money Halftime show yesterday to discuss.
U.S. and China trade talks have also boosted energy prices. It was reported China imported a record amount of U.S. Crude Oil in July. Although this has more to do with the demise of the Dollar, making it U.S. exports cheaper, it has still brought a bullish impact. Especially so as the communist nation has promised to increase purchases from here.
EIA inventory data is also in focus today. The fifth weekly draw in a row is expected. Last night, API released a bullish report; -4.524 mb Crude, -6.392 mb Gasoline and +2.259 mb Distillates. The composite draw of 8.657 raises the bar for the official EIA report which analysts expect -3.694 mb Crude, -1.533 mb Gasoline and -0.726 mb Distillates.
A strong read on Durable Goods this morning will bring added support.
Technicals: Yesterday, Crude Oil closed out above 42.92, the October contract’s March 6th settlement, in its most decisive manner yet. Still, it faces the continuous 200-day moving average at 43.25 and minor resistance at the August 5th swing higher. Regardless, the strength yesterday could not be denied, and the tape remains elevated. A healthy close today paves a path of least resistance to ... 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.
Yesterday’s close: Settled at 1923.1, down 16.1
Fundamentals: Gold extended losses on the week early this morning to a low of 1908 before paring back to yesterday’s settlement. The Dollar has not truly gained ground, but its ability to hold ground has seemed to pressure the metal. Additionally, the S&P’s breakout to new highs and rising yields this week have weighed on the metal. Since the pandemic began, positive steps on the virus treatment front have had a bearish impact and the FDA’s approval of Convalescent Plasma was no different.
Durable Goods was strong today, helping to lift the Dollar. Ultimately though, all are waiting for Fed Chair Powell’s keynote speech tomorrow at Jackson Hole. We maintain a longer-term Bullish Bias, one that we have had steadfastly since the autumn of 2018, but also do not want to ignore the onset of a more lackluster seasonal period for the precious metals complex; traders must be patient in their purchases in order to capitalize.
Technicals: Like the early selling Friday morning, Gold traded down to major three-star support at 1907.4-1909.6 and snapped back ahead of the U.S. equity open. Ultimately, Gold did hold major three-star support at 1923-1931.6 yesterday and this sets the stage for a critical battle to bottom above its previous 2011 record high. On August 13th, on CNBC’s Fast Money Halftime Show, Bill Baruch laid out a roadmap to position long in Gold for the long-term. The idea of per $25,000 account, the trade risks $3700. Buy TWO Micro Gold 10 oz contracts at 1910 and again TWO Micro Gold 10 oz contracts at 1855. The STOP loss is at $1790/oz and the upside target is $2275/oz. At $2275/oz, the profit would be $15,700. You can watch the video here. Call our trade desk at 312-278-0500 to discuss in more detail.... 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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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.