Trading a More Volatile Environment | Morning Express
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4164.75, up 38.25
NQ, yesterday’s close: Settled at 13,919.25, up 125
Fundamentals: U.S. benchmarks started the week lower but rebounded yesterday in a show of strength; this bull market is alive and well. Traders can look to a melting pot of narratives to justify the healthy pullback; price action ran a little too far, a little too quick, geopolitical uncertainties (discussed here through the week), and mounting global Covid cases, to name a few. Regardless, we do believe some of this volatility is here to stay for at least another week. A magnificent start to the month and quarter certainly calls for some profit taking but let us not forget that each month-end so far this year has seen a bat with volatility. Furthermore, next week’s Federal Reserve policy meeting begs to keep things interesting. A quiet economic calendar picks up to finish out the week, starting with today’s ECB policy decision at 6:45 am CT and press conference to follow at 7:30 am CT. We also look to U.S. weekly Jobless Claims at 7:30 am CT, Existing Home Sales at 9:00 am CT, and KC Manufacturing at 10:00 am CT. Tomorrow wraps up the week with the closely watched Flash PMI gauges. At the same time, we are moving into the heart of earnings season and today is an absolute deluge. In Europe, Nestle, Volvo and SAP helped sentiment with earnings beats. Although Credit Suisse did not carry the torch and is down 6%, such a performance from this dog is to be expected. Domestically, AT&T, Dow, Danaher, Blackstone, and DR Horton all reported beats ahead of the bell. Intel headlines after the close.
Technicals: Price action quickly stabilized at the opening bell yesterday and a strong tone for the session was set. The S&P and NQ both traded within 1% of our 4186 and 14,035 levels before settling in overnight. Price action is out in front of our momentum indicators, these come in as first key support for each 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)
Yesterday’s close: Settled at 61.35, down 1.32
Fundamentals: Crude Oil finished yesterday under pressure but continues to battle in front of a critical level of psychological and technical support. Price action rallied in more of a relief following the EIA inventory data, but also as data from the EIA showed increased demand for jet fuel due to a pickup in air travel. Still, mounting Covid cases around the world, specifically India, pose a threat to the demand landscape. Furthermore, Reuters cited Tanker Trackers as noting Iranian exports have increased by 750,000 bpd this year due to price cuts. A couple weeks back we spoke at length on Chinese purchases of sanctioned Iranian Crude, which essentially adds barrels to the market. More broadly, we expect enthusiasm across risk assets, if it continues, to help lift price action from this psychological $60 mark as anticipation for next week’s OPEC+ meeting does the same.
Technicals: With some caution in mind, we do believe that Crude Oil bullishly broke out of a consolidation wedge and the pullback this week is retesting the breakout. We want to buy dips and play the market long if it can hold above 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 (May)
Gold, yesterday’s close: Settled at 1793.1, up 14.7
Silver, yesterday’s close: Settled at 26.57, up 0.73
Fundamentals: Gold and Silver each settled at their highest level in nearly two months. Price action did not extend gains overnight, instead consolidating back ahead of the ECB policy decision and U.S. weekly Jobless Claims. The ECB held policy steady and will continue purchases at least through March 2022. Initial Jobless Claims came in at a fresh pandemic low. Although Continuing Claims continue to trend lower and lower, they are not beating expectations, missing for the last four weeks. Traders must keep a pulse on the Treasury complex and weakness here will take steam out of the precious metals rally this week.
Technicals: Given this week’s ascent, our technical caution comes as price actin dips back below our momentum indicators in a sign of exhaustion. Upon a sharp rally, this indicator trails but accelerates higher. When the rally slows to consolidate, the indicator overshoots the current price action in a sign of exhaustion. What matters here is whether Gold and Silver can hold a constructive pullback; this is something they’ve done well in April, but not so well in 2021 prior. Those momentum indicators align with previous resistance as our Pivots and points of balance today 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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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.