Morning Express | U.S. Bond Yields spillover | Jobs & Inflation | Global Macro Markets

E-mini S&P (September)

Yesterday’s close: Settled at 3370, up 50.00

NQ, yesterday’s close: Settled at 11,126, up 247.50

Fundamentals: The S&P is holding firm within 1% of its record high set February 20th. The tech sector led the way yesterday; Tesla gained 13.1%, Apple 3.3%, Microsoft 2.9%, Amazon 2.7%, and the chip sector was broadly better than 3%. The 2.3% gain for the NQ was a sharp reversal from its healthy pullback which held our major three-star support perfectly and one that shunned the cyclical rotation narrative. Although the Dow gained nearly 1% being led by the likes of healthcare, Apple and Walmart, the Banks and Industrials fell; Boeing lost 2.6%, and JPMorgan 0.9%. Furthermore, amid such a strong session for large caps, the Russell 2000 finished up only 0.15%, but 1% from its session high.

The deadlock in Washington continues and there is no sign that Republicans and Democrats will find common ground. Although House Speaker Pelosi said Democrats are willing to meet halfway, Treasury Secretary Mnuchin later released a statement essentially calling here a liar and unwilling to bridge the gap. The U.S. economy hangs in the balance, and to this point the market is only concerned with its current fix, with little worry about tomorrow; a Federal Reserve Balance Sheet that has nearly doubled in a year would help do that.

Regardless of policy measures Washington could muster, there will be ongoing job concerns. Weekly Initial Jobless Claims and Continuing Claims both came in better than expected this morning and the early reaction has been favorable to the tape. Additionally, Import/Export Price Indices both came in stronger than expected. San Francisco Fed President Daly said yesterday the economy is evolving post-pandemic and many jobs will simply be erased. She added it will have an “uneven impact” across the demographics. This evening, we look to a deluge of economic data from Chia at 9:00 pm CT.

Technicals: The S&P traded to a new swing high yesterday but was contained by our major three-star resistance at 3379-3381.25. The NQ gained 2.3% but was contained perfectly by our 11,187 resistance, which we have spoken about many times over. Our Pivots today encompass our momentum indicators at 3366-3370 and 11,095-11,126; these will be battleground areas and definitive action above our below will ultimately be directionally favorable on the session. First key supports have helped bring a floor to yesterday’s early strength and only a break below ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.

Crude Oil (September)

Yesterday’s close: Settled at 42.67, up 1.06

Fundamentals: Crude Oil achieved its highest settlement since March 5th, yes the day before the dramatic selloff Friday March 6th after OPEC could not come to a production deal and just before the weekend when Saudi Arabia announced a price war in retaliation to a failed deal. Inventory data yesterday pointed to a continued drawdown of U.S. stockpiled by 4.5 mb, totaling 22.5 mb over the previous three weeks. Also, supporting prices was a drop in estimated production by 300,000 bpd, a rise in Exports by 324,000 bpd and a drop of Imports by 389,000 bpd. Gasoline and Distillate inventories also fell more than expected and Cushing added less than expected. Overall, this was a bullish report coupled with a broadly healthy risk-environment.

The IEA, in their Monthly Report released this morning, like OPEC, lowered their demand expectations. The IEA revised this lower with an emphasis on jet fuel demand due to continued weak air travel. However, like OPEC, they remained upbeat on the supply/demand outlook saying that demand has outstripped supply since June.

Technicals: Crude did achieve the aforementioned new high settlement but did not do such decisively. We have not seen a confirmed breakout given the lackluster clearing of major four-star resistance (which aligns with the front-month 200-day moving average) and the overhead ..  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.

Gold (December)

Yesterday’s close: Settled at 1949, up 2.7

Fundamentals: Gold is holding ground after snapping back from yesterday’s overnight low of 1874.2. However, we expect continued volatility given that the historically after a loss of 5% or more Gold has finished lower two weeks out by an average of 2.92%. This is great! We remain unequivocally bullish over the long-term and believe patience will bring a tremendous buying opportunity. There are signs of the U.S. job market and inflation firming up and this has weighed on Gold in recent sessions as U.S. Treasury yields post steady gains. Still, as San Francisco Fed President Daly said yesterday, many jobs are gone for good. Given this narrative, the outspoken rhetoric from Fed Chair Powell that more stimulus is needed and expectations for rates to not increase until 2022, we believe that the rally in Gold is only in the middle innings. A healthy bottoming process in the coming weeks will lay groundwork for new record highs by the end of the first quarter 2021 with 2500-2800 within grasp.

Technicals: Gold has struggled at major three-star resistance at 1955.2-1957.7 with a snap back high of 1961 yesterday. Our momentum indicator has risen to 1942 this morning and continued price action below here will open the door for a fresh wave of selling. Silver has shown better life so far on the session but also faces strong major three-star resistance overhead at 26.80. Our momentum indicator in Silver come sin at 25.91 this morning and above there the tape is healthy. First key support in Gold comes in at ...  Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed directly.

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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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