Morning Express - stocks, oil and gold analysis
E-mini S&P (September)
Yesterday’s close: Settled at 3118.50, up 7.75
NQ, yesterday’s close: Settled at 10,196, up 71.25
Fundamentals: U.S. benchmarks are set to open lower. After a soft finish yesterday, selling pressure kicked in on the European open due to reports the White House is considering additional tariffs on the EU and U.K. The spat is largely tied to the allegiance each nation has to their respective aircraft makers and subsidies (Airbus and Boeing). Risk-sentiment had already found itself peeling back from yesterday’s early exuberance as fresh virus cases stack up across the U.S. Additionally, the EU is expected to announce a ban on U.S. arrivals due to the resurgence in cases. Still, markets are holding it together and volatility is the new normal. Aiding such are comments from U.S. Treasury Secretary Mnuchin as he reminds market participants the White House is weighing fresh fiscal measures.
On the economic calendar, data out of Germany showed renewed business optimism. It is quiet in the U.S., but we look to comments from Chicago Fed President Evans at 11:30 am CT and St. Louis Fed President Bullard at 2:00 pm CT. There is a 5-year Note auction at noon CT.
Technicals: Although we remain cautiously optimistic, price action in each the S&P and NQ is below our momentum indicator. This does give the bears an edge on the session, but it is crucial to understand the levels of strong support below the tape. The early low in the S&P was 3081, a higher high than Monday night’s whipsaw that was met by 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 directly each morning.
Crude Oil (August)
Yesterday’s close: Settled at 40.37, down 0.36
Fundamentals: Crude Oil has fallen back below $40 as risk-sentiment erodes due to a continued uptick in new virus cases across the U.S. Furthermore, the White House has threatened new tariffs on the EU and separately the EU is considering a U.S. travel ban on the heels of fresh virus cases. Inventory data will be a major focus today and the private API survey last night posted +1.7 mb Crude which also weighed on the tape. Analysts expectations for today’s official EIA data are +0.299 mb Crude, -1.304 mb Gasoline and -0.620 mb Distillates. Last week, it estimated production fell by 600,000 bpd; this must be watched closely, and a continued sharp drop will buoy the tape barring a massive build.
Technicals: Price has breached our heightened major three-star support at 39.78-39.85, a level that defined the imminence of a test to 42.33. Given the higher consolidation over the last 24 hours and now pull back, the tape is below our momentum indicator at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly each morning.
Yesterday’s close: Settled at 1782, up 15.6
Fundamentals: Gold hit the highest level since October 2012 early this morning before peeling back. The U.S. Dollar seems to be trying to firm up a little just as equity markets have come off overnight lows. Additionally, U.S. Treasuries are trading off their overnight highs. Overall, this is not a recipe for sustained higher price action as Gold runs into failed highs from November 2011, February 2012, autumn 2012 and this year. This is not where you buy Gold, this is where you capitalize on Gold you already own. While we have seen it fit to imagine a surge through this level before pulling back, and discussed it at length this week, given such landscape we are taking a much more cautious approach in the near-term. Chicago Fed President Evans speaks at 11:30 am CT and St. Louis Fed President Bullard follows at 2:00 pm CT. There is a 5-year Note auction at noon CT
Technicals: Gold is running into a thick wall of resistance at 1785-1800 and while we believe the third knock on this door since mid-April should chew through, it is crucial for traders to lock in gains achieved this week. In the longer-term, the outside bullish reversal on the monthly chart and a potential Golden Cross for Silver remain very positive for Gold’s landscape. However, in the near-term Gold is peeling back and a decisive move below and continue price action below our Pivot of 1782-1784.8 encourages a consolidation lower. We have Neutralized our Bias slightly and will look to be buyers at 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 directly each morning.
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