Morning Express - stocks, oil and gold analysis
E-mini S&P (September)
Yesterday’s close: Settled at 3245.25, up 31.25
NQ, yesterday’s close: Settled at 10,951, up 328.50
Fundamentals: U.S. benchmarks are set to continue their push higher led by tailwinds from stimulus and strong earnings from IBM. The European Union reached a deal on their lauded recovery fund. The watered-down version allows for 390-billion-euros of the 750-billion-euro fund to be distributed as grants, a drop from the initial 500-billion proposal. Although this cements a unified bloc and creates a budget, there will be tight restrictions and approvals needed to receive the grants. Furthermore, the member states must detail how funds will be invested. Still, it seems far-fetched that money will be flowing to the neediest countries before January 2021 as the plan is only expected to be ratified in the third quarter. In Washington, lawmakers hope to pass fresh fiscal measures before their August recess. Markets are certainly pricing in that something gets done despite deep division between both parties on how.
Banks are finding support from the EU news and UBS is a leader this morning after reporting better profit than expected. However, their outlook was less enthusiastic for the second half of the year. In the U.S., Coca-Cola, Philip Morris and Lockheed Martin are all higher after reporting this morning. After the bell, Texas Instruments, Capital One, United Airlines and others will be closely watched.
Technicals: The S&P is breaking out above its June high and trading to the highest level since February 24th and eyeing the gap from February 21st. Both the S&P and NQ are adding to yesterday’s extremely strong session and a path of least resistance is immediately higher for each. Specifically, the S&P is bullish while trading out above ... 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 (September)
Yesterday’s close: Settled at 40.92, up 0.17
Fundamentals: Crude Oil is following the broader risk-environment higher amid tailwinds from the EU recovery fund. Additionally, it is finding support from expectations of another week of inventory draws. There is a lot of overhead technical resistance and this is a story that cannot go unnoticed as September Crude Oil stretches into the gap from March 6th close. That weekend, Saudi Arabia announced the price war. Now, OPEC+ has done a terrific job in balancing supply and demand, but has the market digesting the extra 2 mbpd bound to hit the market beginning in August?
Technicals: Up about 3% on the session, Crude Oil has cleared resistance at 41.28-41.74; a sticky pocket that holds the front-month gap from March 6th and has stopped price action in its tracks. Our momentum indicator is trailing but has risen 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.
Yesterday’s close: Settled at 1817.4, up 7.4
Fundamentals: Continued U.S. Dollar weakness and a watered-down EU recovery fund have lifted Gold to nine-year highs but make no mistake this is Silver doing the heavy lifting this morning. The Gold/Silver ratio has lost 30% since peaking March 16th and Silver is trading today at the highest level since March 2014. The Euro has surged in anticipation of the lauded recovery fund, but today’s finalized version may not put funds in the hands of the neediest nations until at least January 2021. Although equity markets and in particular the banks are being lifted on the hopes, more rational asset classes seem to be selling the news. Ultimately, this has encouraged a grab for some safe-havens. With the metals complex a key beneficiary, the Treasury complex and Japanese Yen are also lurking higher.
Technicals: The latest leg in Gold is running into our next upside target, major three-star resistance at 1849.1. This is a level that has repeated itself across multiple technical studies and is surrounded by resistance levels at 1844.5 and 1853.7. Above there, our next major target is ... 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.
Sign up for your FREE trial of our daily Markets Commentary!
Follow us on our social media sites to stay on the pulse of our latest research and commentary!
Twitter - twitter.com/bluelinefutures
Facebook - facebook.com/BlueLineFutures
StockTwits - stocktwits.com/BlueLineFutures
Latest blog posts - bluelinefutures.com/blog
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.