E-mini S&P (December)
Yesterday’s close: Settled at 2880.50, down 57.25
Fundamentals: Yesterday’s bloodbath is trying to stabilize, and price action is modestly higher at best. Economic data is in focus early and it was a bleak start after European Services and Composite PMIs came in below expectations. Eurozone Retail Sales was in-line MoM. U.S Weekly Jobless Claims are up at 7:30 am CT and this comes after a disappointing ADP Payroll Report, not so much because of September but because of August’s revision lower. This certainly leaves a sour taste in the minds of traders and investors ahead of tomorrow’s Nonfarm Payroll and after a dismal ISM Manufacturing Tuesday. Services and Composite PMIs are due at 8:45 am CT, but the big reads of the session come at 9:00 am CT with ISM Non-Manufacturing and Factory Orders. Fed members will attempt to soothe worries, Fed Governor Quarles speaks at 7:30 am CT, Cleveland Fed President Mester is at 11:10 am CT and Fed Vice Chair Clarida takes to the tape after the close at 5:35 pm CT. At this point, short of rolling out QE4, how much can they really do? Our narrative has been this market is making a transition from Fed easing dependence to stronger data dependence and the data has left it out to dry. The S&P is down 3.5% this week with the odds of a cut later this month rising from 45% to 75%.
Deteriorating growth around the world and a seasonally weaker time of year for Crude Oil has weighed on the Energy sector, Bill Baruch joined CNBC’s Closing Bell yesterday to discuss just this. If not the economic data, earnings must start to paint a better picture. PepsiCo, a leader all year, topped earnings estimates this morning and gained as much as 3% before settling in. Constellation Brands is also due ahead of the bell. Costco, another stock posting hockey stick gains this year, is due following the close. After today, the market is left with a bit of a gap, the heavy hitters and banks don’t begin reporting until the week after next.
Technicals: The tape turned sharply lower yesterday and has not been able to dig itself out. Major three-star support in the S&P at 2889-2993 is working to buoy the tape for now but it was the breakdown in the NQ below major three-star support at the 7600 area from what we referenced as a more consolidated move lower that got the party started. Our momentum indicators align to bring us first key resistance levels at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.
Crude Oil (November)
Yesterday’s close: Settled at 52.64, down 0.98
Fundamentals: Crude Oil lost ground for the seventh straight session, marking a 17% drop from its peak close on Monday September 16th after the Saudi attacks. Yesterday’s EIA data was complete 180 from the expectations mounted by a headline draw from API the night before. News of a build of 3.1 mb of Crude pressured the tape into a crucial level of technical support. Panic is starting to set-in, in the near-term and this could signal that Crude is ready for a breather, however, we remain intermediate to long-term bearish during this seasonally weaker time of year. Furthermore, Saudi Arabia’s ability to meet demand through the outage has actually become a more bearish factor proving the world has a dependable supply of Oil rather overcoming the mounting geopolitical fears. Bill Baruch breaks down the next levels of Crude and behemoth energy stocks Exxon and Chevron on CNBC’s Closing Bell yesterday.
Technicals: The trend is undoubtedly lower, and the bears have an enormous edge in making new lows as long as the tape stays contained below major three-star 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 1507.9, up 18.9
Fundamentals: Gold has posted back to back gains of more than 1% in a steady recovery from what became panic selling partly due to an overcrowded long position. With equity markets under pressure, the Dollar trickling lower and probability of a cut later this month mounting above 75%, it is foreseeably a very stable landscape for Gold. Still, the metal will be very data dependent and the catalyst for the aforementioned market moves was Tuesday’s dismal ISM Manufacturing followed by August’s lower revision in ADP Payrolls. Weekly Jobless Claims at 7:30 am CT and PMIs at 8:45 am CT will be important, but most crucially will be ISM Non-Manufacturing and Factory Orders at 9:00 am CT. It is widely believed the Services sector is the last to go, a miss could really rev-up Gold. Lastly, traders want to keep in mind that Nonfarm Payroll is tomorrow and that any momentum coming out of this week is likely to see a tailwind Monday from the conclusion of China’s Golden Week. Typically, selling has occurred coming into this holiday, as seen Friday and Monday, while steady buying has followed the end.
Technicals: Our technical narrative has not changed much from yesterday; the bulls are in the driver’s seat 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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