Morning Express | Technicals & Fundamentals | CFTC Positioning | Stocks, Oil, and Gold

E-mini S&P (September)

Last week’s close: Settled at 3344.75, up 0.50 on Friday and up 81.25 on the week

NQ, last week’s close: Settled at 11,122.75, down 138.50 on Friday and up 232.25 on the week

Fundamentals: U.S. benchmarks are pointing to modest overnight gains after President Trump announced four executive orders over the weekend to extend unemployment benefits and defer payroll taxes after Congress failed to reach bipartisan legislation by Friday. China is also making waves at the onset of the week after arresting Jimmy Lai, a wealthy Hong Kong media mogul, on suspicion of collusion with foreign agents. The communist nation continues to tighten its grip in the region, something markets are turning a blind eye to. In addition, China announced sanctions on 11 U.S. politicians, including well-known Senators Ted Cruz and Marco Rubio. The retaliation comes after the U.S. sanctioned a number of Chinese officials Friday, a list that is now expected to expand. Tensions between the two world powers are boiling on many fronts and last week President Trump signed an executive order prohibiting U.S. residents from doing business with TikTok and WeChat, giving them 45 days to comply. Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels emailed each morning. Nonfarm Payroll on Friday was very solid, printing 1.763 million jobs gained in July, more than the 1.6 million expected. The Unemployment Rate dropped from 11.1% to 10.2%, better than the 10.5% expected. Furthermore, wages jumped +0.2% MoM when they were expected to fall 0.5%. Manufacturing Payrolls though fell well short of the 253,000 jobs expected, coming in only at 26,000. Inflation data from China overnight came in a bit stronger than expected and has helped buoy the metals complex from Friday’s weakness. In the U.S., JOLTs Job Openings are due at 9:00 am CT and Chicago Fed President Evans speaks at 3:00 pm CT.

Technicals: The NQ lost 1.2% on Friday, whereas the S&P held ground and the Russell 2000 surged by 1.4% in what is being coined a cyclical rotation. The NQ stopped short of violating the 11,000 mark as it traded down more than 200 points. The low of 11,035 aligns with previous support at 11,051 to create first key support today; a level buying the tape overnight. Our Pivot aligns our momentum indicator with the previous 11,187 mark; below here the bears are holding the very near-term edge gained Friday. As for the S&P it has spent the bulk of the session out above our rare major four-star pocket at 3339.25-3344.25 which aligns with the historic gap from February 21st, a level that the market has yet to show much respect for. Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels emailed each morning. Bias: Neutral

Resistance: 3355.50*, 3369.25**, 3397.50-3400***

Pivot: 3339.25-3344.25****

Support: 3322.25**, 3314*, 3297.50-3300**, 3288.50-3292**, 3271-3277***, 3258.50-3263.50*** NQ (September)

Resistance: 11,261-11,283**, 11,325-11,347**, 11,400-11,408***

Pivot: 11,140-11,187

Support: 11,035-11,051**, 10,983-10,988**, 10,939**, 10,863.75-10,895***, 10,785-10,794*** 10,510-10,540*** Crude Oil (September)

Last week’s close: Settled at 41.22, down 0.73

Fundamentals: Crude Oil is up more than 1% on the session with commodities broadly gaining ground due to favorable risk tailwinds from President Trump’s executive order and healthy inflation data from China. The market continues to turn a blind eye to boiling U.S.-China tensions and although this is not new, the two world power are expected to hold a planned meeting to evaluate the Phase One trade deal this week. Official data from the EIA last week showed U.S. Crude production dropped by 1.99 mbpd. This coupled with estimated data showing a continued drop of production and expectations for a third week in row of lower Crude stockpiles has kept a floor under recent waves of selling.

Technicals: Price action held first key support overnight before turning higher and trading healthily within our Pivot of 41.65-41.98 which also aligns with our momentum indicator. Rare major four-star resistance remains overhead at 42.64, this is the March 6th close for the September contract and a level that Crude Oil could not settle above upon strength last week. Above there is the 200-day moving average at 43.76. Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels emailed each morning.  Bias: Neutral

Resistance: 42.64****, 43.76***, 46.37***

Pivot: 41.65-41.98

Support: 41.02-41.28**, 40.08-40.27**, 39.65**, 38.77*** Gold (December)

Yesterday’s close: Settled at 2028, down 41.4

Fundamentals: Gold is snapping back from Friday’s beleaguering like it never happened. A solid to strong Nonfarm Payroll report strengthened the Dollar on Friday, but the greenback has failed to follow through. This coupled with an uptick in Chinese inflation data overnight paved the way for the metals sector to resume the tear they’ve been on.

Technicals: Managed Money in Gold, according to the CFTC Commitment of Traders, is not showing a flush of buyers racing into the Gold. In fact, the net-long position fell by 3,664 contracts as of last Tuesday from the previous week and remains more than half of the level seen in February. This paves the way for higher prices, signaling that although investors and funds are long, they can certainly be more long. After settling on the low Friday and working higher into the electronic close, price action dropped sharply shortly after the open last night and held support at 2021-2027.5, a higher low from Friday. Silver is again leading the way this morning sticking its neck above $29. First key support today aligns with our momentum indicator and now comes in at 2041.9-2043. Our Pivot will act as a barometer to this morning’s strength at 2054-2058 and if it can hold out above there, we imagine a move to strong resistance at 2071-2072.5. Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels emailed each morning. Bias: Neutral/Bullish

Resistance: 2071-2072.5***, 2090.6**, 2131**, 2259.2***

Pivot: 2054-2058

Support: 2041.9-2043**, 2021-2027.5** 1998.4-2004***, 1985.9**, 1974.7-1979**, 1955.2-1957.7***

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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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