• Blue Line Futures

Morning Express | Jackson Hole Inflation Shake-Up | Consumer-Confidence | Stocks, Oil, & Gold

E-mini S&P (September)

Yesterday’s close: Settled at 3427.50, up 35.00

NQ, yesterday’s close: Settled at 11,636.25, up 74.25

Fundamentals: The S&P finished out its record setting day with a bang, ripping from a low of 3410.50 to its fresh closing high of 3427.50 in the final hour. The strength continued early last night as investors look to Jackson Hole as the next bullish catalyst. One week ago, the market felt slighted; the Federal Reserve was reluctant to implement yield curve control. Like a junky, it quickly shifted focus to the next possible fix. Fed Chair Powell is expected to announce the unprecedented approach of allowing inflation to run hot. Furthermore, the idea of introducing “average inflation targeting”, which is exactly how it sounds; if inflation has underwhelmed for an extended period, as we have witnessed, then it can symmetrically run hot during a healthy recovery. This idea precedes the notion of having to unwind current stimulus measures. The only headwind now could be the build-up to a speech that leaves much to be desired. U.S.-China trade is back in the news and helping to keep a bid under risk-assets. Talks were held over the phone and it was noted “both sides see progress”. A cornerstone of the reinvigorated talks is an old narrative; China will ramp up purchases of U.S. Crude Oil over the next month. This is not new news as China had already promised the move as it is advantageous due to the weaker Dollar. The price weighted Dow Jones is shaking up its average ahead of Apple’s stock split. The Index announced it will drop ExxonMobil, Pfizer and Raytheon. The lead replacement is software giant Salesforce, which helps offset Apple’s maneuver, followed by Amgen and Honeywell. Ironically, Salesforce reports after the bell today along with retailers such as Best Buy and Nordstrom. A slate of German data this morning, including GDP and Business Climate, nudged out expectations. From the U.S., we look to Case Shiller Home Price Index at 8:00 am CT and CB Consumer Confidence at 9:00 am CT along with New Homes Sales and Richmond Manufacturing. There is a 2-year Note auction noon CT.

Technicals: Yesterday’s strong close for the S&P and then overnight extension creates major three-star support on the session at 3427.50 which aligns with our momentum indicator at 3430. Price action is facing our next major three-star resistance at 3438.50-3446.75 and this has seemed to slow a near-term overbought tape. At the same time, the NQ is running into major three-star resistance at 11,721 and has struggled here after trading 11,722 on the intraday open yesterday. The NQ is waffling at and just below our Pivot which encompasses yesterday’s settlement and our momentum indicator; continued action below here will open the door for a consolidation lower. Despite yesterday’s low in the NQ that moved into 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. Crude Oil (October)

Yesterday’s close: Settled at 42.62, up 0.28

Fundamentals: October Crude Oil is an eyelash below its recovery high of 43.68 and up about 2% on the session as it finds tailwinds from storm disruptions in the Gulf and Chinese purchases. Tropical Storm Laura was upgraded to a hurricane and landfall is expected tomorrow; all as anticipated. The first weather disruption, Marco, dissipated quickly. However, the one-two punch has halted about 1 mbpd in production while slowing refining. The U.S. and China held productive talks over the phone and China has promised to continue ramping up Crude Oil purchase. The communist nation imported a record 3.6 million tons of U.S. Crude in July, but the move was advantageous to them due to the weaker Dollar and as they raced to play catchup ahead of scheduled trade talks. Inventory data is also making its way into the picture and early estimates are for -3.833 mb of Crude, the fifth straight weekly draw.

Technicals: Price action is decisively out above the March 6th gap close of 42.92 and has also stuck its nose out above the October 200-day moving average at 43.31. A close out above both of these levels ultimately 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. Gold (December)

Yesterday’s close: Settled at 1939.2, down 7.8

Fundamentals: Gold is not responding to the anticipation of Fed Chair Powell’s speech at Jackson Hole Thursday as equity markets have (discussed in the S&P section). Headwinds this week come in the tune of economic data around the world that has been steady to improving, Covid-19 treatment news and a U.S. Dollar that although is lingering at two-year lows is stable. We have exuded and continue to exude patience with the metals complex as we believe there is better value lower and especially so as the seasonal strength winds down over the next three to five weeks. Consumer Confidence data is due at 9:00 am CT.

Technicals: Price action has been below our momentum indicator for the bulk of the session but has so far responded to major three-star support at 1923-1931.6, a level that it broke through Friday but did not settle below. The lower highs are showing signs of exhaustion and this is another reason for our patience; look to buy at lower levels. Feel free to call our trade desk to discuss a game plan tailored to you at 312-278-0500...  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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