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Morning Express | Jobs Friday with Actionable Macro Market Ideas from Blue Line Futures' Trade Desk

E-mini S&P (September)

Yesterday’s close: Settled at 3461.50, down 117.75


NQ, yesterday’s close: Settled at 11,800.50, down 611


Fundamentals: Although our goal was never to pick the exact top, the timing of our warning was perfect (please read the Morning Express from 9/2 and 9/3 for more details). Furthermore, we would not be surprised to see U.S. benchmarks pare the bulk of yesterday’s losses and finish the week on a strong note. In January and February, we said the market was frothy and attributed waves of selling more in part due to the need for a healthy correction rather than Coronavirus fears. The pandemic did shut the entire economy down, and that selling took place in March. However, we experienced heavy gyrations in late January before making new record highs in February as the froth continued. In the end, March’s selloff was exacerbated due to the overheated and tightly wound run in January and February while the economy was slowing. Early on, Covid-19 was an excuse for the healthy pullback that was going to happen either way. Yes, we do think there is further to go in this healthy correction that started yesterday, but the question is whether the market had just experienced the late January selling or the late February selling. We will find out in the coming days.

Bill Baruch joined the TD Ameritrade Network yesterday to discuss markets broadly as well as the irrational exuberance in stocks.

Nonfarm Payroll is due at 7:30 am CT and expectations are for 1.4 million jobs to have been added in August. The running tally of jobs lost since March is currently at 12.3 million and a solid read today would deflate that number closer to 10 million. Average Hourly Earnings are supposed to remain steady MoM, neither gaining nor contracting, and slip to 4.5% YoY. The Unemployment Rate is expected to cross back below 10% to 9.8%, it was at 10.2% in July.

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Also, traders should keep a close eye on ECB Executive Board member Lane who talks at 10:00 am CT. Earlier this week, he noted that the EUR/USD at 1.20 “matters”. Essentially, he aided what is showing early signs of being a top in the exchange rate. We have spoken at length this week on how crucial U.S. Dollar weakness has been for the stock market rally. What the Dollar does today will certainly swing commodities; Crude Oil and Gold levels are below.


Technicals: We will continue to hold our cautiously Bearish Bias on both an intermediate-term technical and fundamental basis. Price action in the S&P sliced through a crucial level of major three-star support at 3485.50 yesterday. We have said it here before, we love seeing levels repeat themselves. The .382 from Wednesday’s record high to yesterday’s low is 3486.50. The overnight swing high stopped perfectly at what is now crucial major three-star resistance and helping to define a potential intermediate-term downtrend at 3585.50-3586.50. Our momentum indicator is slipping sharply and edging below that resistance at 3580, this will be lower through the morning at minimum. Major three-star support is the low from yesterday and today, aligning with the close from August 24th and low from August 25th. Although we have several layers of major three-star support a crucial one to note is 3392.50, it is the intraday gap from the August 21st close before the S&P ran up. A break below there will open the door to rare major four-star support at 3330-3344.75. The NQ did stop yesterday at our rear major four-star support at 11,638-11,726 and has waffled around that level for much of the overnight as it still acts as support despite a low of 11,582 which tested key support at 11,575. The bears must achieve a close below this rare major four-star level to set the index on a path towards 11,000. Only a close back above 12,000 will neutralize the weakness and encourage a rush of buying.

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Bias: Neutral/Bearish


Resistance: 3480**, 3485.50-3586.50***, 3505.75**, 3525-3533.75***


Pivot: 3461


Support: 3443**, 3421.75-3427.50***, 3395.75-3400***, 3392.50***, 3330-3344.75****

NQ (September)


Resistance: 11,919**, 11,991-12,023***, 12,128-12,135**, 12,256-12,284***


Pivot: 11,800-11,840


Support: 11,638-11,726****, 11,575**, 11,271***, 11,000-11,087***

Crude Oil (October)


Yesterday’s close: Settled at 41.37, down 0.14


Crude Oil battled back yesterday to unchanged after testing and holding the psychological $40 mark. It is now lingering around our 41.46-41.58 major three-star resistance. Our momentum indicator this morning is at 41.11 and price action above here is overall supportive, encouraging a close back above resistance.

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Bias: Neutral/Bearish


Resistance: 41.46-41.58***, 42.92-43.05***, 43.52**, 46.37***


Pivot: 41.11


Support: 39.89-40.00**, 38.86-39.00***, 35.88***

Gold (December)


Yesterday’s close: Settled at 1937.8, down 6.9


Gold has responded at a crucial level of technical support for the third time in a row over the last week; a higher low. Each low has aligned with a trend line from the March selloff. Major three-star support is at 1928-1932 and continued action above here is constructive. The bulls must achieve a close above 1955.5-1958 in order to neutralize the latest wave of weakness.

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Bias: Neutral/Bullish


Resistance: 1955.5-1958***, 1964.2**, 1973-1976.6***, 1981.7-1987***, 2001.2**, 2020-2028***


Pivot: 1937.8-1940.7


Support: 1928-1932***. 1914.7**, 1907.4-1909.6***, 1889.6***, 1845.4****, 1829.8***


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