Morning Express | Technical & Fundamental Landscape | Stocks, Oil, and Gold
E-mini S&P (September)
Yesterday’s close: Settled at 3288.50, up 25.00
NQ, yesterday’s close: Settled at 11,044.25, up 153.75
Fundamentals: The Monday rally was real, carrying momentum from Friday’s late surge. The NQ hit a fresh record high intraday yesterday and notched it again overnight on today’s session. Microsoft, Apple, Salesforce and semiconductor stocks led the way, whereas the broader market outside of healthcare struggled. Some of that enthusiasm is dissipating, which has become typical on Tuesdays, but the S&P is still above Friday’s high and the NQ is within 1% of its record.
U.S. and China tensions continue to boil over TikTok. China has snapped back after President Trump exclaimed a sale could only go through if the U.S. gets a cut of the deal. Although China is calling this ‘open robbery’, how is it any different than much of Chinese policy over the last 20-30 years? While TikTok grabs the headlines, friction has increased in recent weeks, after the Houston consulate and the removal of Chinese journalists. We maintain our narrative; the market does not believe President Trump will escalate tensions ahead of the election and this poses downside risk.
Washington remains in deadlock; the White House is trying to find common ground with House Democrats who also have a large divide between Senate Republicans. The previous fiscal measures exhausted last week, and lawmakers rush to find a solution to keep the pandemic unemployment benefits flowing. President Trump signaled he is looking into executive action to keep the economy afloat amid disagreement.
On the economic calendar, we look to ISM NY Business Conditions at 8:45 am CT and Factory Orders at 9:00 am CT. Chinese Services data is due this evening and tomorrow we look to the private ADP Payroll survey and ISM Non-Manufacturing.
Technicals: Yesterday’s low volume rally drifted higher and out above crucial resistance levels. The low volume, which notched last Wednesday’s Fed Day by an eyelash, was specifically notable being the first day of the month. The tape is consolidating lower this morning and hovering out above 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 each morning.
Crude Oil (September)
Yesterday’s close: Settled at 41.04, up 0.74
Fundamentals: Crude Oil remains buoyant above $40, finding tailwinds from the broader risk-environment, strong economic data and early estimates of inventories drawing down last week. The NQ set a fresh record high overnight and yesterday ISM Manufacturing grew at the fastest pace since March 2019. Analysts expect -3.267 mb of Crude and the private API survey is due after the bell today. What appears to be strong headline demand via inventories is working to offset the additional supply from OPEC+ hitting the market this week and ongoing virus fears. Regardless of the two headwinds, traders continue to defend any and every dip and clearly hold the belief OPEC+ will remain constructive to the landscape. We maintain that we want to be buyers, but from lower levels.
Technicals: Price action settled at our first key resistance level yesterday but has overall stayed contained. Despite the long-dated consolidation up here, Crude Oil does exude some exhaustion amongst the market profile. Our momentum indicator aligns with the 40.61 mark this morning and 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 each morning.
Yesterday’s close: Settled at 1986.3, up 0.4
Fundamentals: Lower Treasury yields are offsetting a bounce back in the U.S. Dollar and helping to keep a bid under Gold as it sits just below $2000. U.S. jobs, additional fiscal measures and U.S.-China tensions are all driving the narrative this week. Ahead of jobs though, ISM Manufacturing was the best since March 2019 yesterday and Factory Orders for June are due at 9:00 am CT today. We maintain the belief that Gold has higher to go in the long-run, but at these levels and given the recent surge, we are cautious; you do not want to buy Gold when everyone is screaming for it, that is when you want to capitalize on Gold you already own.
Technicals: Small pullbacks in Gold have been extremely constructive and overall today’s session has battled above our Pivot of 1985.9-1991. Yesterday’s tape, after slipping from a new record, held first key support and today brings a higher low so far. We maintain that we want to be buyers closer 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.
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