E-mini S&P (June)
Yesterday’s close: Settled at 2827.75, up 22.75
Fundamentals: The Federal Reserve is in the driver’s seat and ballooning expectations for a rate cut as early as July are boosting risk-sentiment. U.S benchmarks have turned sharply from the depths of Monday when tech behemoths were under antitrust fire and the news of tariffs on Mexico was still fresh. Yesterday’s pullback after the bell reached a crucial level of technical support just as ISM Non-Manufacturing crushed expectations. We said right here that, “Until either growth worsens, the Trump-Xi meeting doesn’t deliver or if inflation pokes its ugly head and keeps the Fed from cutting rates, we are likely to see risk assets attempt a recovery at the very least.” The technical landscape is a major driver in today’s action but on the fundamental front to couple with a dovish Fed, there are hopes that the U.S and Mexico will reach a deal in the very near future.
This morning, the ECB signaled they plan to leave rates at their current levels through the first half of next year and unveiled details of TLTRO III set to get underway in September. As always on ECB days, traders should keep an eye on the banking sector; the ETF EUFN is a great gauge, no plans of a cut in the immediate future should help lift sentiment on this front. ECB President Mario Draghi begins his speech at 7:30 am CT. Also, it is important to note that earlier German Factory Orders came in better than expected and this is favorable to the tape.
In the U.S, weekly Jobless Claims and Nonfarm Productivity is due at 7:30 am CT. At 9:00 am CT the IMF will present its annual review of the U.S economy in Washington. Dallas Fed President Kaplan speaks at 7:40 am CT and New York Fed President Williams speaks at noon.
Technicals: Yesterday’s intraday pullback in the S&P to major three-star support at 2805 was a buying opportunity. Furthermore, the NQ pinged major three-star support at 7161-7179.25. Both lows bled these crucial levels but were ultimately buoyed by the overall momentum and strong ISM data once these gaps from Tuesday’s settlement were covered. The S&P closed out above 2817.50 yesterday which is bullish as we discussed in the Midday Market Minute; our major three-star level that aligned multiple technical indicators, most importantly a trend line from the high and an indicator that we use to define a market in near-term bearish territory. The settlement at 2827.75 is now first key support, traders can look to buy a stable picture here and into strong support at 2812.75-2817.50, ultimately risking a decisive break below here. The NQ is seemingly lagging on this recovery and still faces resistance at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude Oil (July)
Yesterday’s close: Settled at 51.68, down 1.80
Fundamentals: When extremely bearish fundamental news cannot keep a down-market down, there then becomes a high probability of a recovery. This is what we are seeing in Crude Oil as price action has exacerbated the downside. The tape slipped sharply to new lows after yesterday’s bearish EIA data that showed large builds across the board in the tune of a 14.56 mb composite. This was led by +6.771 mb from Crude. This morning, comments from Russian President Putin signaled Russia is happy with Crude at $60-65 while Saudi Arabia wants it higher; August Brent is currently above $61. Iraqi Energy Minster added this morning that more stabilizing actions are needed. Overall, this is helping to turn Crude Oil along with the broader risk environment. We completely Neutralized our Bearish Bias yesterday morning but will now introduce a minor Bullish Bias in anticipation of a consolidation higher at minimum due to overblown fundamentals and technicals.
Technicals: Price action shattered through our rare major four-star support yesterday at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterday’s close: Settled at 1333.6, up 4.9
Fundamentals: Yesterday’s reversal in Gold was disappointing but only a strong ISM Non-Manufacturing read does not take away from the broadly favorable macro picture. The U.S Dollar Index gained ground through yesterday but is has reversing all of such on the heels of today’s ECB policy meeting, higher Jobless Claims and weaker Nonfarm Productivity. Tomorrow’s Nonfarm Payroll will be absolutely crucial for the metal and either confirm a breakout now or encourage a healthy consolidation pattern. We remain unequivocally intermediate and long-term Bullish in Bias, but more cautious given the upcoming fundamental news.
Technicals: In yesterday’s Midday Market Minute, we said pullbacks to 1327.7 are a buying opportunity and the low was 1331.5; aggressive buyers could have caught a nice $10 swing overnight. On February 20th, Gold hit a front-month April high of 1349.8, yesterday’s high was 1348.9. Furthermore, the August contract in February traded to a high of 1361.5. Gold has had a strong run with the 14-day RSI now reaching above 70. Given this technical landscape and tomorrow’s Nonfarm Payroll, traders must take a cautious near-term approach. Still, as long as price action holds above ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Click below to sign up for 1 or all 4 of our daily Blue Line Express reports
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.