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E-mini S&P (December)
Yesterday’s close: Settled at 3432.50, up 0.25
NQ, yesterday’s close: Settled at 11,691.25, up 30.50
Fundamentals: U.S. benchmarks are consolidating at crucial levels of technical support as the stimulus circus drags on. Negotiations between U.S. Treasury Secretary Mnuchin and House Speaker Pelosi will continue into today with the major roadblock being state and local funding. In a tweet late yesterday, President Trump pointed to Democrats as holding out on a Coronavirus Aid deal in order to “BAIL OUT poorly run (and high crime) Democrat cities and states”. Exhaustion is certainly setting in on these negotiations, but the market remains constructive and hopeful. Ultimately, we have said multiple times we do not expect a deal ahead of the election but anticipate one within a reasonable time after. Furthermore, our Bullish, yet very cautious Bias, characterizes our upbeat longer-term outlook and how we believe dips are a buying opportunity from an investment standpoint. However, caution must be exercised into and through the election. In fact, back in 2016 a wait and see approach paid off very well when opportunities arose as early as election night. Tonight, the country will be watching the two candidates bump heads in the final debate before the November 3rd election.
Weekly Jobless Claims were broadly better than expected this morning. Both Continuing and Initial Claims trekked to a new pandemic low of 8.37 million and 787,000. Existing Home Sales are due at 9:00 am CT. The Treasury will auction off 4-week, 8-week and 5-year TIPS this afternoon. Richmond Fed President Barkin, a 2021 voter, speaks at 12:10 am CT and Dallas Fed President Kaplan, a 2020 voter, speaks at 5:00 pm CT.
On the earnings front, both Coca-Cola and Dow Inc. topped estimates and are up 3% and 1.5% ahead of the bell although their results were arguably underwhelming. Coca-Cola’s revenue slipped by 9% YoY and Dow reported a loss. Freeport-McMoRan is one as commodity traders we love to keep a pulse on; they turned a profit when compared to a year ago due to the rise in Gold and Copper prices.
Yesterday, after the bell, Tesla reported its fifth straight quarter of profits and is up 4-5% ahead of the open. Chipotle, however, is down 5% premarket as the company added deliveries and bears the rising costs of the maneuver; this could open the door for a buying opportunity given the steady rise in sales.
Technicals: The levels are straightforward as U.S. benchmarks consolidate and await fundamental triggers. Major three-star support in the S&P at 3406.75-3410 continues to buoy waves of selling and last night’s low of 3402 snapped back steadily into the U.S. hours. Similarly, we have seen the same for major three-star support in the NQ at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets you trade emailed directly each morning.
Crude Oil (December)
Yesterday’s close: Settled at 40.03, down 1.67
Fundamentals: Yesterday is what it was; a failed breakout. A battle was lost, but not the war; we remain optimistic that Crude is heading higher over the intermediate to longer-term with the potential for a surge any day. Still, there is headline risk and this coupled with deadlock in Washington has generally speaking thrown cold water over risk-assets. The tape yesterday had already begun to stall out technically and headline developments were unenthusiastic before a surprise build in Gasoline, 1.895 mb when -1.829 mb was expected, secured the sector’s fate on the session. Although demand prospects in China remain extremely optimistic, a lower Chinese Yuan overnight is weighing on commodity prices.
Technicals: Crude Oil fell out of bed yesterday after failing at major three-star resistance at 41.50-41.74. It sliced through the 200-day moving average, but is battling at that mark at 40.62 today which aligns with our momentum indicator at 40.21 as our Pivot; continued action above here helps to repair the damage from yesterday and pave the way for recovery and retest into major three-star resistance once again. The great news is that 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 for the markets you trade emailed directly each morning.
Yesterday’s close: Settled at 1929.5, up 14.1
Fundamentals: Gold is getting trucked after once again failing at our major three-star resistance at 1933-1937. Fundamentally, a stronger U.S. Dollar on the heels of continued deadlock in Washington has weighed on risk-assets. Additionally, the Chinese Yuan is digesting U.S. Dollar strength, and this has weighed heavily on the metals space as opposed to U.S. Dollar strength being more of a byproduct of Euro weakness. Better than expected economic data from Jobless Claims to Existing Home Sales has also lifted the U.S. Dollar and taken wind out of Gold’s sails. However, make no mistake this move is just as much due to the ongoing consolidation in Gold and strong overhead technical resistance as it is tied to headline fundamentals.
Technicals: After yesterday’s failure, Gold finds itself testing major three-star support at 1902-1905. This is a crucial level that keeps a rising consolidation pattern intact and a break below here opens the door for continued selling down to 1877.1-1880. Still, there is a support at 1894.6-1896.6 that aligns a recent low with a recent low settlement. Silver is much of the same, failing at what we characterized as major three-star resistance at 25.75-26.00. It now must regain our momentum indicator at 25.05 in order to stabilize. However, there is key support at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets you trade 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.