Morning Express - stocks, oil and gold analysis

E-mini S&P (September)

Yesterday’s close: Settled at 3265.50, up 14.25

NQ, yesterday’s close: Settled at 10,804.25, down 46.75

Fundamentals: With a focus on earnings and stimulus, U.S. benchmarks are set to open higher. Despite unenthusiastic results from tech behemoth and cloud bellwether Microsoft, Tesla’s headline numbers are keeping the risk-environment buoyant. They reported a net profit of $114 million, $428 million of which came from selling emission credits; yes, you read that correctly. Aiding the overnight surge was results from Unilever and Daimler. Unilever, the British-Dutch consumer goods company, topped YoY profits and the stock is up 7%. Although Daimler posted losses, the Mercedes maker was upbeat on the second half of the year and the stock is up 5%. There is a deluge of earnings both before and after the bell today.

Watch our What’s Moving video where Bill Baruch covered Wednesday’s action.

As for stimulus, Washington is working to iron-out a fifth bipartisan fiscal bill since the onset of the pandemic. The current measures are due to run out at the end of the month and Congress begins their recess August 7th. Late yesterday, the market seemed to respond positively to headlines that Republicans were considering reducing unemployment payments to $400 per month from $600 per week ($2400 per month). Although a drastic reduction, it would be good through the end of the year. The market’s response was likely due to positive steps forward and guarantees for a longer extension. Headline developments will certainly swing sentiment through the session.

The market is broadly ignoring U.S.-China tensions, but traders should keep an ear to the ground. Ultimately, there is a belief President Trump will not increase pressure on the communist nation heading into the election in fear of derailing the rally. Instead, we may see a number of small maneuvers like shutting down the Houston consulate.

Technicals: Although the S&P set a new swing high and the NQ is up nearly 1% on the session, the strength over the last 24-48 hours does not ‘feel’ sticky. We have been cautiously Bullish in Bias for much of the last several weeks and months, but we do not ‘feel’ this is the time to be buying. At this point, we are prepared to see a correction of 3-5% whether it be from today’s high or major three-star resistance at ... Please sign up for a Free Trial at Blue Line Futures to have our entire techncal outlook, actionable bias and proprietary levels emailed each morning.

Crude Oil (September)

Yesterday’s close: Settled at 41.90 down 0.02

Fundamentals: Crude Oil pushed higher overnight and early this morning but has so far failed at Tuesday’s high, a level aligned with the March 6th gap. Commodities broadly have been on a tear for weeks; Crude Oil, Copper and Gold led the way and we are now seeing Silver join the party. U.S. Dollar weakness is certainly a catalyst coupled with liquidity from central banks around the world sloshing around and inflating assets and the demand for them. Yesterday’s EIA inventory report was arguably bearish, but Tuesday evening’s private API survey set a bearish bar. Of importance was a build at Cushing, the third in a row, as well as a rise in estimated production by 100,000 bpd. We maintain that the trend is clearly higher, but the ceiling from here is very limited barring a fresh catalyst.

Technicals: Price action has traded around our Pivot of 41.72-41.78 and buyers have defended major three-star support at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire techncal outlook, actionable bias and proprietary levels emailed each morning.

Gold (August)

Yesterday’s close: Settled 1865.1, up 21.2

Fundamentals: Gold surged again overnight gaining as much as 4.2% on the week at its high of 1887.9. Silver also extended its run to a high of 23.67, gaining as much as 20% on the week. The tape is settling in a bit and the U.S. Dollar is attempting to firm-up as the Dollar Index hit the lowest level since March. The Treasury complex is grinding higher and this is supportive to Gold. We feel the move in Treasuries alludes to a potential wave of risk-off, one that Gold may have front-run. Overall, we expect Gold to set a new record high, but maintain this is not the time to be chasing the metal, it is the time to be capitalizing on Gold you already own. Pullbacks to technical support continue to be buying opportunities.

Technicals: We are reducing our Bullish Bias to cautiously Bullish in order to exude profit taking at these levels. In the near-term, Gold’s spinning top on the session paves the way for a healthy pullback. First key support is 1865-1868.5; this aligns out momentum indicator, yesterday’s settlement and our achieved upside target. The bulls will continue to be in the driver’s seat above here. We are looking to major three-star support at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire techncal outlook, actionable bias and proprietary levels emailed each morning.

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Bill Baruch



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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