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Morning Express | S&P at 3,200 | Gold & WTI Oil Value Zones | Bill Baruch breaks down the macros

E-mini S&P (December)


Yesterday’s close: Settled at 3231.25, down 68.00


NQ, yesterday’s close: Settled at 10,829, down 320.50


Fundamentals: The S&P covered the 3316 settlement from Friday just before yesterday’s opening bell and the tape has been under pressure ever since. U.S. benchmarks are all lower at the onset of U.S. hours and ahead of another deluge of Fed speak. A narrative of ours is that ‘markets do not like uncertainty’. In fact, we are very bullish equity markets from these levels after the election, because regardless who wins there is either some certainty or less uncertainty coupled with accommodative Federal Reserve policy. Yesterday, President Trump said, “We are going to see what happens,” when asked if he will commit to a peaceful transfer of power after the election. While this is a common phrase used by the President, he is egging media to construe such however they see fit. Coupled with his push to find a Supreme Court Justice replacement, there is now added uncertainty, and markets are acting accordingly.

Fed Chair Powell and U.S. Treasury Secretary Mnuchin begin their third and last day of Congressional testimony at 9:00 am CT. Weekly Jobless Claims data underwhelmed, and we look to New Home Sales at 9:00 am CT. There is a 7-year Note auction at noon CT, Chicago Fed President Evans speaks then, and New York Fed President Williams follows at 1:00 pm CT among others.


Technicals: The tape is heavy this morning and the S&P has set a new low, whereas the NQ faces last week’s low at 10,656. Given yesterday’s steady weakness, our momentum indicators trail the tape and hang out above first key resistance levels. Our Pivots represent pockets of previous lows aligned with other technical indicators and continued action below there leaves the door wide open for selling. A flush into major three-star support in the S&P at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietray levels emailed each morning.


Crude Oil (November)


Yesterday’s close: Settled at 39.93, up 0.13


Fundamentals: Crude Oil snapped back from early weakness last night but has again slipped at the psychological $40 mark as risk-assets are broadly under pressure; please refer to the S&P section. Yesterday’s inventory data ultimately supported the market with headline draws across the board, an increase in exports and a small drop in estimated production. Yet, the market whipsawed higher before quickly stalling. Into last week’s OPEC strength, we were adamant that the market would see the rally come in; for all intents and purposes it has but has failed to follow through. For this reason, we are again very Neutral and see long-term value from lower levels.


Technicals: Price action has struggled to clear first key resistance at 40.30-40.51 while major three-star resistance at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietray levels emailed each morning.


Gold (December)


Yesterday’s close: Settled at 1868.4, down 39.1


Fundamentals: The washout in Gold continued last night as it fished for a critical level of support at 1845.4 and our buy zone at 1855. The U.S. Dollar is strengthening as shorts who were late to the party are now getting squeezed. Additionally, it is important to remember and understand that Gold has tracked risk-assets and the U.S. Dollar has become the safe-haven; for the time being. The metals complex will only find footing once the U.S. Dollar rally stalls. Fed Chair Powell and U.S. Treasury Secretary Mnuchin begin their third and last day of Congressional testimony at 9:00 am CT. Weekly Jobless Claims data underwhelmed, and we look to New Home Sales at 9:00 am CT. There is a 7-year Note auction at noon CT, Chicago Fed President Evans speaks then, and New York Fed President Williams follows at 1:00 pm CT among others.


Technicals: Gold must do three things to setup for a big-time rally. First, we want to see it hold our rare major four-star support at 1845.4 (our buy zone at 1855 was achieved). Second, it must clear resistance hurdles within proximity in order to work to neutralize this week’s weakness. Lastly, it must, must close back above major three-star resistance at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietray levels emailed each morning.


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