Morning Express | YCC | FOMC Minutes | OPEC's JMMC | Jobless Claims | Stocks, Energies, & Metals
E-mini S&P (December)
Yesterday’s close: Settled at 3372.75, down 14.25
NQ, yesterday’s close: Settled at 11,332, down 77.75
Fundamentals: U.S. benchmarks are pointing lower ahead of the bell. Yesterday, the S&P failed to tag its record high from February 19th by two points and began slipping after the release of the FOMC Minutes. With the failed high under its belt, the Fed’s reluctance to implement yield curve control weighed on risk-assets broadly and strengthened the Dollar. Hopes of yield curve control have been a tailwind to stocks, but the committee showed concern that rolling out such a program would not allow them to control their balance sheet. The same balance sheet they have already added $3 trillion to just this year, ballooning to $7 trillion. We have said for the last week or so that we feel the market is exhausted at these levels. After yesterday, it is also clearly exuding its addiction to stimulus. The liquidity and measures already added is not enough, it NEEDS new programs. Well, today and tomorrow could prove to be a defining moment for risk-assets after the S&P failed to set a fresh record and the Fed underwhelmed. We are not calling for a crash, but a healthy 3-5% pullback certainly is needed.
On the economic calendar, Weekly Initial Jobless Claims came in a touch higher than expected, above one million and Philly Fed fell just shy of expectations. However, Continuing Claims did slip below 15 million for the first time since April 16th.
Technicals: There is a double top failure budding in the S&P, traders and investors cannot ignore this. Although we have introduced a cautiously Bearish Bias, we certainly do not recommend chasing the tape lower if you have not been trading such since the second half of yesterday. In fact, we have major three-star resistance at ... 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.
Crude Oil (October)
Yesterday’s close: Settled at 43.11, down 0.01
Fundamentals: Crude Oil is pointing lower today along with the broader risk-environment. Yesterday’s failed record in the S&P coupled with the Fed’s reluctance to implement yield curve control are certainly weighing on markets. Such has pressured even on the stealthily strong move in Gasoline yesterday following a larger drawdown of inventories than expected. Crude Oil’s headline draw was shy of expectations and much lower than that from the private API survey. All has encouraged a lower tape that has struggled for nearly two months to break through the March 6th close. OPEC’s JMMC meeting is mulling over strong compliance. No action is expected, but its still something to keep an eye on. The strong compliance in and of itself has been a tailwind for Crude Oil. This along with headlines of Chinese stimulus on Monday (although a much smaller net amount) and expectations for larger U.S. exports to China supported the tape early in the week. On the other side of the coin, the U.S. Dollar has strengthened in the last 24 hours weighing on commodities.
Technicals: We have said it here before and will say it again; we want to be buyers from a lower level. The budding failure at the March 6th gap and 200-day moving averages could encourage additional waves of selling if the broader environment holds weak. The Commitment of Traders Managed Money Net-Long position has held comfortably at elevated levels. Considering this, a move lower has the ability to garner liquidation of such longs. Our ideal buy target is ... 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.
Yesterday’s close: Settled at 1970.3, down 42.8
Fundamentals: Gold’s electronic close was much worse than settlement by about $30. The Dollar strengthened after the FOMC Minutes primarily due to the Fed’s reluctance to throw additional measures at the economy through yield curve control. Overall, Gold’s weakness should not come as a surprise as we have been warning the recent two-sided volatility will continue as the metal builds a base for a run that may not fully play out until the first quarter of next year. At that time, we expect a minimum of $2300. Still, today’s data set was soft with Weekly Initial Jobless Claims coming in above one million and Philly Fed falling shy of expectations. This continues to support the intermediate to longer-term landscape for Gold.
Technicals: Gold is responding against major three-star support at 1923-1931, but we are not too confident the low is in. In fact, in the past, we have laid out where we suggest positioning for the longer-term and how; call our trade desk to discuss. For now, continued price action below ... 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.
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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.