E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 3727.50, up 32.50
NQ, yesterday’s close: Settled at 12,832.75, up 128.25
Fundamentals: U.S benchmarks are extending their record run on the heels of ‘relief’ in Washington. Still, the drama continues. As expected, the House ran with comments from President Trump last week and yesterday passed a bill increasing direct payments for individuals to $2,000. The legislation is supposed to hit the Senate today, likely to get shot down, it is still unclear whether they plan to vote or ignore the maneuver. Regardless, it echoes a great divide, a divide that this stock market rally may be dependent on. The checks and balances that make our nation so amazing may block the increased payments but will quickly come front and center one week from today when the Georgia runoff election is held for the final two Senate seats. For now, Republicans hold a majority which makes for a split Congress. Historically, in the year after an election, gridlock outperforms a sweep. Although increased stimulus checks may not get passed, other integral parts of this bull market such as taxes and big tech are likely to be much safer.
Fiscal stimulus in Washington is not the only tailwind. The FTSE and Nikkei are each higher by at least 2%. Last week, in the eleventh hour, the U.K. and EU reached a post-Brexit free trade deal and today’s open exudes a sigh of relief. There is also added strength from the anticipation of U.K. regulators approving AstraZeneca’s vaccine today. The Nikkei’s historic run continues, after gaining 15% in November, it has added more than 4% in December, half of which came today. Today’s rip takes the index to the highest point since August 1990, when it was collapsing.
Technicals: Yesterday, we put our cautious nature aside and again went outright Bullish both the S&P and NQ. Ultimately, what is there not to love when stock indices are breaking out on a Monday? It is certainly not the time to fight the tape. Today, we will reduce our Bias from outright Bullish to Bullish/Neutral as we want to invite some caution; if you were not long yesterday or were not buying last week’s pullback, this is us saying your timing is off. By all means, we are still Bullish, just simply dialing it back a little. Remember, we believe 3976 and then 4621 to be in the cards for the S&P in that aforementioned long game. The S&P is trading out above our near-term target of ... 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 (February)
Yesterday’s close: Settled at 47.62, down 0.61
Fundamentals: Crude Oil is enjoying risk-on tailwinds to pare yesterday’s losses. Although Russia is driving home the point that production needs to be restored, the rhetoric is not negative. Russia’s Energy Minister Novak has said the price range of $45 to $55 has been achieved and if production is not restored, others will. February Brent is currently at out above $51. Furthermore, they only want to add 500,000 bpd and although such may be holding back added gains, tailwinds from U.S. fiscal policy, vaccine news, Brexit, and Asian demand have more than offset such. We look to U.S. inventory data coming into the picture with API after the close. Early estimates are for -2.1 mb Crude, +1.778 mb Gasoline, and +1.067 mb Distillates.
Technicals: The tape is climbing from yesterday’s late low into settlement and now battling above out momentum indicator which comes in at 48.08. That late low held budding support at 47.25-47.50 and was higher than that from the Sunday night open. Continued action 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.
Gold (February) / Silver (March)
Gold, yesterday’s close: Settled at 1880.4, down 2.8
Silver, yesterday’s close: Settled at 26.539, up 0.631
Fundamentals: Gold is hanging strong and Silver is consolidating back from yesterday’s tremendous start to the week. However, the overnight performance of the precious metals space is a bit disappointing given the U.S. Dollar is broadly lower by 0.4%. There is the smallest hope the Senate will pass the $2,000 stimulus payments to individuals, a bill passed by the House yesterday. Doing such would likely send the U.S. Dollar to new lows and provide enough fuel for precious metals to breakout above imminent resistance levels. However, such is not necessary and if the bill is shot down, we are likely to see some constructive volatility across the space.
Technicals: Today’s consolidation is not too much of a surprise after such a Sunday night rip; the bulls have been burned all year chasing the rips in Gold and Silver. We have steadfastly advised to pick your spots; it is the only way to be successful over the long-term. After quickly failing at trend line resistance from the August record high Sunday night, Gold battled back to again fail. It has since proved to hold major three-star support at 1871-1873 and is working to build a floor. Whereas Gold is trading around our momentum indicator at 1882, Silver’s weakness has sent it south of our momentum indictor that comes in at 26.48 this morning. Still, Silver is working well to build a floor at 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.
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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.