E-mini S&P (June)
Yesterday’s close: Settled at 2845.75, up 18.00
Fundamentals: U.S benchmarks are extending gains and the S&P is at a two-week high ahead of jobs data. Hopes that Washington won’t implement a 5% tariff on Mexico Monday are boosting the risk-appetite early as the two sides continue discussions. In other news, the People’s Bank of China Governor Yi Gang emphasized that the central bank has many measures in its toolkit to combat a weakening economy and continued trade tensions. China and Hong Kong were closed today so a reaction could not be seen.
Nonfarm Payroll is due at 7:30 am CT and Average Hourly Earnings will be the main focus with expectations coming in at +0.3% MoM. Job growth will also be closely watched, especially so after the private ADP payroll survey came in at nearly a decade low Wednesday. Excluding inflation, equity markets want to see strong economic data in order to trade higher. ADP’s 27,000 read on job growth certainly lowers the bar from the 185,000 expected from the official report today. We imagine anything above 125,000 would be digested as moderate. Inflation is what matters most amidst a weakening economic outlook because that is stagflation. At the onset, it would also make it difficult for the Fed to cut rates this year. The CME’s FedWatch Tool shows a 67.3% probability the Fed cuts 25 basis points at or by their July 31st meeting. If this expectation is taken away, so will this week’s gains.
Technicals: Pullbacks yesterday proved to again be a buying opportunity. We said here that, “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.” Price action is higher this morning, leaving a gap at yesterday’s settlement price of 2845.75 and this aligns to bring major three-star support. We remain upbeat, however, there is another strong resistance level at 2857.50. What may matter most today is the NQ and price action ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.
Crude Oil (July)
Yesterday’s close: Settled at 52.59, up 0.91
Fundamentals: Crude Oil slipped once again through yesterday morning but held Wednesday’s low with a 51.17 print and consolidated. We find the failure to move lower at a very strong level of technical support the true catalyst in ripping higher ahead of settlement. Price action is about $2 from that low and seeing further strength on comments from Saudi Energy Minister Al-Falih that after talks with Russia he is confident that OPEC+ will extend cuts at what looks to be a meeting on July 2-4. We said here yesterday morning that we found the jawboning favorable to stabilizing the picture.
Technicals: After another direct test to our rare major four-star support at 51.23-51.63, we have an official rejection. The rip higher is testing into key resistance at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.
Yesterday’s close: Settled at 1342.7, up 9.1
Fundamentals: Gold has had an exceptional week but its close will rely tremendously on today’s Nonfarm Payroll report. Average Hourly Earnings are expected to come in at +0.3% MoM and a stronger number here will certainly hurt the rally that safe-haven assets have seen in recent weeks due to ballooning expectations the Fed will cut rates in the near future. Job growth will be crucial in comparison to Wednesday’s ADP Payroll report.
Technicals: We remain unequivocally Bullish in Bias Gold in the intermediate and long-term. Pullbacks are buying opportunities. Still, there is resistance aligning with the front-month and August highs of the year. However, continued price action above ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.
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