Monetize a Bounce and Watch a Round | Morning Express 05/31/22

Posted: May 31, 2022, 8:45 a.m.

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- EU agrees on Russian Oil embargo in sixth sanctions package.

o Cannot import Crude Oil and petroleum products by sea

o Temporary exemption on Crude delivered through pipelines.

o Estimated to cut 90% of Russian Oil imports

- July Crude Oil sets new contract high overnight on the news and breaks out above 116.43.

Bill Baruch gave you the technical Weekly Roundup on Crude, Gasoline, and energy stocks on Friday.

- Higher Crude Oil stokes inflation, U.S. 10-year yield is responding, hits highest since May 24th.

- Technical resistance in 10-year futures price also working to lift yields, spinning top/doji at the 50-day moving average Thursday and Friday.

- U.S. Dollar Index rebounds from 50-dma on Sunday night open and extends gains Russian Oil embargo. Technical support and safe-haven tailwinds.

- Fed Governor Waller, a known hawk, said yesterday he expects 2.5% of rate hikes this year and favors 50-bp hikes until inflation drops closer to 2%

- President Biden, Fed Chair Powell, and Treasury Secretary Yellen are scheduled to meet today to discuss inflation.

- Chinese Manufacturing PMI beat last night, 49.6 versus 48.0, Caixin read due tonight.

- Case Shiller Home Price Index due at 8:00 am CT

- CB Consumer Confidence due at 9:00 am CT.

E-mini S&P (June) / NQ (June)

S&P, yesterday’s close: Settled at 4155.75, up 100.00 on Friday and 256.25 on the week

NQ, yesterday’s close: Settled at 12,677.75, up 398.50 on Friday and 837.00 on the week

- We remain cautiously Bullish in Bias with a more intermediate-term focus, but from a trading perspective, a 10.3% bounce off the low and a rip through rare major four-star resistance by 80-some points in the S&P during holiday hours is reason enough to capitalize on our longs.

- As a trader, we plan to watch a few rounds, and look for entry again on the long side, will bring updates through the Midday Market Minute as the session unfolds.

- Friday intraday the S&P ripped through rare major four-star resistance aligning with the gap from the May 6th.

- The NQ settled Friday right at rare major four-star resistance aligning with this gap, only trading through our wide range of 12,695-12,767 in the Sunday-Monday holiday hours.

- Amid this morning’s pullback, how well will supports be received?

- First key support in the S&P and NQ comes in at 4119.75-4122 and 12,560-12,594.

- S&P has major three-star support just below at 4108-4109.

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NQ (June)

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Crude Oil (July)

Yesterday’s close: Settled at 115.07, up 0.98 on Friday and 4.79 on the week

Bill Baruch gave you the technical Weekly Roundup in Crude Oil, Gasoline and energy stocks; we now have a breakout on our hands.

- Can higher prices be maintained on a closing basis?

- EU agrees on Russian Oil embargo in sixth sanctions package.

o Cannot import Crude Oil and petroleum products by sea

o Temporary exemption on Crude delivered through pipelines.

o Estimated to cut 90% of Russian Oil imports

- U.S. Dollar is broadly strengthening,

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Gold (August) / Silver (July)

Gold, yesterday’s close: Settled at 1857.3, up 3.4 on Friday and 8.9 on the week

Silver, yesterday’s close: Settled at 22.096, up 0.131 on Friday and 0.422 on the week

- We are taking a similar approach to the metals as we are with our long S&P/NQ Bias; Gold bounced 4.6% and Silver 10.0% from recent lows. It is time to monetize the trade and watch a few rounds.

- Let us not forget that end of the months, especially on expiration months, there has been added two-way volatility in Gold and Silver; encourages cautiousness today and ultimately as we lead into Nonfarm Payroll on Friday.

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Silver (July)

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