E-mini S&P (December)
Last week’s close: Settled at 2970.75, up 29.75 on Friday and up 19.75 on the week
Fundamentals: U.S benchmarks held a steady dose of gains into the weekend amid conflicting headlines pointing to an interim U.S-China trade deal. Similar to Schrodinger’s cat, it was the uncertainty and jawboning that drove price action in the S&P to the October 1st high before retreating. Once this box was opened, the only substance investors and traders took home was that Washington postponed Tuesday’s deadline to increase tariffs and China promised more agricultural purchases. This became clearer late in the session and the S&P finished nearly 1% from its swing high. China added to the mounting uncertainty surrounding any progress by releasing a statement similar to the ones in the past emphasizing the two sides must work together with mutual respect adding they want more talks before signing what has been coined the ‘Phase One’ deal.
The U.S economic calendar is light before Retail Sales Wednesday but earnings kickoff with the JPMorgan tomorrow followed by Goldman Sachs, Citigroup and Wells Fargo Wednesday. This puts the poor global data in the spotlight today, both Chinese Imports and Exports contracted more than expected last night. Tonight, we get inflation data from China before the IMF’s growth forecast and German ZEW Sentiment data tomorrow. Currently, the odds of a cut later this month sit at 75%. Safe-haven assets such as Bonds, Gold and the Yen have rebounded healthily from Friday’s lows.
Technicals: We updated levels in Friday’s Midday Market Minute with first key support in the S&P coming in at 2969. Price action settled at 2970.75 and has waffled around this area which is now our pivot to start the week. Below here, the bears have an edge in consolidating the tape lower. Although price action favors the bulls above here, we have strong resistance at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning.
Crude Oil (December)
Last week’s close: Settled at 54.70, up 1.19 on Friday and up 1.89
Fundamentals: As noted here Friday, we introduced a minor Bearish Bias in order to increase this coming out of the weekend. We also discussed in Friday’s Midday Market Minute that we are using options strategies to fade the spike in Crude ahead of the weekend with limited risk. Without further headline escalation of tensions in the Middle East, as expected, Crude Oil is sharply off Friday’s settlement and highs that aligned perfectly with our major three-star resistance level. Although China’s September Crude Oil imports rose 10.8%, this did little to mitigate the poor read broadly. Imports and Exports contracted more than expected, exuding the deteriorating growth conditions globally. This coupled with a bit of cold water poured over U.S-China trade expectations and the bears now have a clear fundamental edge. The IEA’s Monthly Report on Friday was negative and tomorrow we look to the IMF’s updated global growth forecasts. All in all, we remain longer-term Bearish in Bias Crude with a renewed near-term Bearish outlook.
Technicals: Crude Oil could not have failed more perfectly against major three-star resistance at 54.70-55.00. Price action is now handedly below our pivot of 54.09-54.29 and testing first key support at 53.55-53.557; a close below here will continue to fuel the bears with an intermediate downside target of ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning.
Last week’s close: Settled at 1488.7, down 12.2 on Friday and down 24.2 on the week
Fundamentals: Gold and other safe haven assets are snapping back from Friday’s beatdown with continued doubt overshadowing U.S and China trade progress. China released a statement this morning saying they want more talks before singing the ‘Phase One’ deal. Gold had already been grinding higher overnight but on this news it immediately jumped $5 to ping the $1500 resistance mark. The economic calendar is light in the U.S until Wednesday’s Retail Sales data but global growth is certainly in the crosshairs after China’s poor trade balance data last night, with China inflation tonight and IMF GDP and German ZEW Sentiment tomorrow.
Technicals: Gold clung to major three-star support at 1484.5-1488.7 on Friday’s weekly settlement and this ultimately reinvigorates a bit of a Bullish Bias. While we remain unequivocally bullish Gold in the long-term but consider us cautiously optimist in the near term given the constructive technical landscape at this major three-star support level. Still, we must see a close above first key resistance at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each morning.
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