E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 3922.50, up 44.50
NQ, yesterday’s close: Settled at 13,302, up 110.00
Fundamentals: U.S. benchmarks surged in the second half yesterday. For the Dow, it was to a fresh record and for the NQ, it was a rebound to settle above a crucial level of technical support. The momentum carried into the evening hours, but weakness in the Treasury space overnight halted the rally, putting stocks once again on their backfoot ahead of the opening bell. The 10-year Treasury yield hit 1.466%, the highest in exactly a year as the March 10-year futures contract achieved our downside target of 134.5. The resilience of investors to hold exorbitantly valued Tech stocks versus risk free return will be tested again through today’s open. Investors could look to U.S. Dollar weakness this morning as a supportive factor. However, this comes on the heels of better-than-expected Eurozone Confidence and Sentiment data. Such has also brought a tailwind to rates globally; the German 10-year Bund hit the highest level since March 20th, last year. From the U.S., the second look at Q4 GDP is expected to improve from 4.0% to 4.2%. Also, amid a busy morning, Durable Goods, Jobless Claims, and Atlanta Fed President Bostic all hit the tape at 7:30 am CT. It goes unsaid that much stronger-than-expected data will continued to lift rates, however, we also must wonder how much of a beat is already priced in given the recent string of better-than-expected economic activity. Pending Home Sales are due at 9:00 am CT, Fed Governor Quarles speaks at 10:10, Bostic again at 11:00 am and NY Fed President Williams is expected at 2:00 pm CT.
Technicals: We believe yesterday was a significant technical turning point in the market, however, the fundamental headwinds are real; rising yields. The S&P ripped through major three-star resistance at 3900-3903 and did not look back into the close. At the same time, the Dow roared to a record high and the Russell 2000 broke a downtrend line from its February 16th failed high. These moves provide crucial levels of major three-star support in each index and an inflection point defining the next bull leg. For the S&P this is of course 3900-3903, for the Dow it is ... 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 (April)
Yesterday’s close: Settled at 63.22, up 1.55
Fundamentals: Crude Oil surged to 63.79 overnight, the highest since last year’s reversal in the first week of January upon the Soleimani killing and Iran’s retaliatory attacks. Yesterday’s EIA data confirmed the build posted by API the day before, but estimated loss of 1.1 mbpd during the week ending February 19th and prolonged outages are driving the bull case. As Crude Oil continues higher, it emphasizes a potential impact on next week’s OPEC+ meeting as it encourages the cartel to reinstate cut production. Furthermore, some lost U.S. production may say offline for much longer than expected and this helps better balance the supply/demand outlook. Treasuries are lower again today and this is weighing on the risk-landscape broadly, but these inflationary tailwinds have so far been the exudence of Crude Oil and today’s U.S. Dollar weakness should offset any adverse effect that Treasuries cause on Crude itself.
Technicals: Price action has pulled back from setting a new swing high but remains in a strong uptrend. The decisive action above our previous upside target of 62.50 continues to set a path of least resistance higher with 65.65 in the cards. Major three-star support now 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.
Gold (April) / Silver (March)
Gold, yesterday’s close: Settled at 1797.9, down 8.0
Silver, yesterday’s close: Settled at 27.928, up 0.186
Fundamentals: Gold and Silver are battling each other for direction this morning. Whereas Silver is holding well at a key technical level and attempting to extend gains, Gold is down about 1%. The rise in Treasury yields has certainly weighed on Gold much more than Silver. Today’s U.S. Dollar weakness is working to offset Treasuries in providing a tailwind to Silver and helping to lift Gold out of the gutter once again. The second look at Q4 GDP did not improve as much as expected (from the first look) at 4.1% from 4.0%, instead of 4.2%. However, Jobless Claims and Durable Goods both exceeded expectations. Gold’s initial reaction was lower, but Atlanta Fed President reminded markets that the Fed’s mandate is full employment, not GDP. This was the first improvement in jobs three weeks, but job growth remains far below expectations and Fed Chair Powell recently said real Unemployment is closer to 10%. This is the leading factor in encouraging more of both fiscal and monetary support, a bullish factor for Gold.
Technicals: Gold has slowly rolled over since its high two days ago and failure at major three-star resistance. The overnight high of 1805 aligns exactly with yesterday’s fallout, and technical resistance levels have steadfastly kept rally attempts in check. Still, the bulls are responding to rare major four-star support so far this morning 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.