• Blue Line Futures

Morning Express - stocks, oil and gold analysis

E-mini S&P (September)

Yesterday’s close: Settled at 3047.75, up 40.75


NQ, yesterday’s close: Settled at 9973.75, up 108.25


Fundamentals: The week heats up. Last night, China passed the Hong Kong National Security Law and the U.S. responded by removing the region’s special status. The legislation comes in part as a response to the city’s pro-democracy battles, but also as China tightens its grip on the region. More than anything else, it is important to understand China wants power and world domination, they are exerting many strategic influences on Asia broadly and the world; some we may see clear, like this legislation, and others go largely under the radar to the general public. The U.S.-China trade war, though uncomfortable, is agreed across political ideologies as a necessary step to rein in this growing superpower and overall reduce the U.S.’s dependence on the communist nation. With this legislation’s highest punishment being life in prison, it is proof that China will lie, cheat and steal to get what they want.

The news also comes as Manufacturing PMI from China last night beat expectations at 50.9. Remember though, this fourth marginal monthly expansion in a row is from the record low of 35.7. Still, it is clear the economic data from China and around the world is improving from lockdown, zero demand conditions.


From the U.S. today, we look to Case Shiller Home Price Index at 8:00 am CT. This comes on the heels of a massive recovery in Pending Home Sales yesterday at +44.3% MoM. Again, this was after dropping 21.8% in April. CB Consumer Confidence from June is due at 9:00 am CT and expected to improve from May. Today also brings a deluge of Fed speak. NY Fed President Williams Is at 10:00 am CT, Fed Governor Brainard follows at 10:05 and Minneapolis Fed President Kashkari speaks at 1:00 pm CT. All are 2020 voters, but none will be more important than Fed Chair Powell and U.S. Treasury Secretary Mnuchin who testify before the House Financial Services Committee at 11:30 am CT and address the drastic stimulus measures used to keep the economy afloat during the pandemic and the path of the U.S. economy. Speaking of measures, yesterday the Federal Reserve’s corporate debt window provided a tailwind for the late rally in risk-assets.


Technicals: The recovery from Sunday’s low in the S&P has achieved major three-star support and in the NQ has neared it. These levels at 3058-3063.25 in the S&P and 10,082-10,0888 in the NQ align multiple technical indicators as well as Friday’s intraday high. A decisive move above here is not in the clear, for instance strong resistance in the S&P comes in just above at ... Please sign up for a Free Trial at Blue Line Future to have our entire technical outlook, actionable bias and proprietary levels emailed directly each morning.

Crude Oil (August)


Yesterday’s close: Settled at 39.70, up 1.21


Fundamentals: Crude Oil again led a risk-on charge. News of strong compliance from Russia and a Sunday night hold across risk-assets coupled with expectations for small draws at the least in tomorrow’s EIA inventory report lifted price action through close. Better than expected Chinese Manufacturing PMI data added an early bid as it alludes to continued imports from the sector’s bellwether. However, we find three and even four narratives that bring value in fading price action broadly against the psychological $40 mark and the gap close from March 6th. First, Iraq is overproducing, and this could easily be what tears apart OPEC+ compliance in July. Next, the fear of a second wave of Covid-19 eroding the recovery in demand. Lastly, at these price levels, it is inevitable that U.S. production begins to recover in the near futures. Additionally, if any of these three narratives spook the market, there is an overly positioned bull camp that would quickly liquidate.


Technicals: The overnight high of 39.80 stalled at major three-star resistance, providing for a nice swing trade to those fading the rally. For instance, if you are bearish, one could stage two or three sell orders within such a wide pocket of strong resistance and not have to be right at one specific point. We will tighten this resistance up to align with yesterday’s settlement. Our momentum indicator comes in at ...  Please sign up for a Free Trial at Blue Line Future to have our entire technical outlook, actionable bias and proprietary levels emailed directly each morning.

Gold (August)


Yesterday’s close: Settled at 1781.2, up 0.9


Fundamentals: Gold is consolidating at the top-end of its recent range but has struggled to truly breakout. Treasury prices finished firmly yesterday, and this alludes to the ramp in risk-assets not being on strong footing. It also paves the way for Gold upon the early stages of risk-off. One thing we maintain though, is Silver must join for Gold to achieve the next leg. The economic calendar gets very busy through the rest of the week and ahead of the holiday weekend. CB Consumer Confidence from June is due at 9:00 am CT and expected to improve from May. Today also brings a deluge of Fed speak. NY Fed President Williams Is at 10:00 am CT, Fed Governor Brainard follows at 10:05 and Minneapolis Fed President Kashkari speaks at 1:00 pm CT. All are 2020 voters, but none will be more important than Fed Chair Powell and U.S. Treasury Secretary Mnuchin who testify before the House Financial Services Committee at 11:30 am CT and address the drastic stimulus measures used to keep the economy afloat during the pandemic and the path of the U.S. economy. Tomorrow, we look ISM Manufacturing and Thursday is Nonfarm Payroll.


Technicals: We remain more Bullish on Gold in the near-term than Neutral given Friday’s perfect test of our buy target at major three-star support at 1748.6-1753. It is concerning that the metal has not followed through and is struggling at major three-star resistance at ...  Please sign up for a Free Trial at Blue Line Future to have our entire technical outlook, actionable bias and proprietary levels emailed directly each morning.



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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.

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Futures trading involves substantial risk of loss and may not be suitable for all investors.