E-mini S&P (June) / NQ (June)
S&P, last week’s close: Settled with 4169, up 62.00 on Friday and down 56.25 on the week
NQ, last week’s close: Settled at 13,387, up 286.75 on Friday and down 322.75 on the week
Fundamentals: U.S. benchmarks have pared some of Friday’s enthusiasm ahead of Monday’s opening bell. Last night, a deluge of economic data from China was in line with expectations, but generally underwhelmed, signaling the sharp pandemic rebound has dissipated. This morning, we look to NY Empire State Manufacturing, a number that only recently began turning a corner, and comments from two 2021 Fed voters, Fed Governor Clarida and Atlanta Fed President Bostic. Retail earnings are in the spotlight beginning tomorrow with Walmart, Home Depot, Macy’s, and more. These come on the heels of Friday’s poor Retail Sales data, showing spending sputtered out after March’s stimulus check surge. With President Biden’s $4 trillion spending plan still being heavily debated in Congress, the White House announced the bill passed in March carved out additional household stimulus that could hit individuals as early as mid-July. Also, in the headlines is a streaming merger between AT&T and Discovery; both stocks are up ahead of the bell. With the Retail earnings pulse and inflation conversation driving sentiment, traders must not ignore a worsening Covid situation through Southeast Asia. Although markets in China and Hong Kong were stable today, the Nikkei finished down 0.92% and Taiwan’s Taeix down 2.99%. However, the U.S., at 29,017 cases, hit the lowest level since June and the U.K. is relaxing restrictions.
Technicals: On Friday, including the opening bell spike, every 30-minute bar in the S&P made a higher high through 1:30 am CT; 11 straight bars. Clearly, the market traded very directional on Friday and this has been the trend on Fridays and Mondays when things get off to such a strong start. This is something we have highlighted many times here. Price action came close but did not achieve rare major four-star resistance at 4183.50-4186. As we look to the day ahead, our Pivot and point of balance in the S&P is what we expected to be strong resistance on Friday at 4156.25-4158.50. This morning, our momentum indicator also aligns here. Given Friday’s strength, strong support does sit below and first comes in at ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
Crude Oil (June)
Last week’s close: Settled at 65.37, up 1.55
Fundamentals: Crude Oil is slipping back from Friday’s strong session, like equity markets. Economic data from China last night was very mixed. On one hand, the data is showing strong YoY growth, everything from Industrial Production and Fixed Asset Investment to Crude Oil throughput is up firmly. However, on the other hand, these gains are less robust than data from Q4. This does bring concern when coupled with a worsening Covid situation in Southeast Asia. On Friday, Baker Hughes data showed eight rigs added, bringing the total to 352, the highest since the April 24th report. Disappointing Retail Sales data in the U.S on Friday is also a factor and this all ultimately helps explain why rallies have been capped. In the U.S., we are likely to see a strong rebound in the call for Crude by refiners after the pipeline outage created Gas shortages and this will distort data over the coming two weeks but could easily bring a supportive hand when coupled with the relaxation of Covid restrictions and the mask mandate.
Today is options expiration for the June contract and there is large open interest between $64 and $65, likely keeping the tape rangebound and rallies through $65 on a tight leash.
Technicals: We have had a more Bullish Bias across all timeframes but will dial such back in the near-term given strong major three-star resistance overhead and that we believe Friday’s broad strength across the risk-landscape comes in today. Our Pivot is our momentum indicator at 65.22 this morning and continued action below here will open the door for a consolidation back to the midpoint of the recent range at 64.42. Still, we are very Bullish over the intermediate to longer-term and will look to buy pullbacks into major three-star support at ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
Gold (June) / Silver (July)
Gold, last week’s close: Settled at 1838.1, up 14.1 on Friday and 6.8 on the week
Silver, last week’s close: Settled at 27.365, up 0.306 on Friday and down 0.112 on the week
Fundamentals: Gold and Silver finished the week on a very positive note and carried that strength into Monday’s session where Gold hit the highest since February 10th. The U.S. Dollar Index finds itself lingering at the lowest level since mid-February after last week’s CPI rally stalled out and poor Retail Sales weighed on the tape. The Chinese Yuan, although up against the U.S Dollar on the month, pared about half of those gains last week and has again been contained by a crucial technical level aligning with a trend line from the January 2014 high. Traders must keep an eye on the Yuan as well as developments with China’s steel industry that could create added volatility. Another very supportive factor for precious metals is a stable Treasury landscape. Despite the blowout Core CPI MoM, the U.S. 10-year yield only gained 4 basis points on the week. This is amazing, but if you consider the conditions surrounding the surge in inflation and the rise in Covid cases around parts of the globe, then less so. Regardless, a stable Treasury picture through this week’s auctions will be critical for Gold to maintain its strength.
Technicals: Gold is pushing through rare major four-star resistance at 1843-1850, and a close above here will signal the downtrend in precious metals should be over. Of course, we still want to see this on a weekly basis, but there could be a massive move between now and Friday that tests 1900 upon a true breakout. Those chasing strength should carefully measure risk. Early on, our rising momentum indicator comes in at 1845 and continued action above here favors a breakout. Similarly, the strength in Silver is very favorable. Overall, Silver has traded through a healthy bottoming pattern and a close above ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
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Blue Line Futures
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.