E-mini S&P (December)
Yesterday’s close: Settled at 2965.50, down 5.25
Fundamentals: No news is good news; U.S benchmarks are grinding higher ahead of the open without fresh jabs on the trade front. JPMorgan unofficially kicked off this much anticipated earnings season by beating expectations and posting record revenue. The stock is up about 2% premarket and sits 1.25% from its record high set September 13th. Goldman Sachs followed with not so flattering results missing EPS estimates but beating on revenues. Trading revenues looked to be a bright spot and the stock is down more than 1% premarket. Citigroup posted marginal headline beats while Wells Fargo missed estimates, both stocks are losing ground premarket. Blackrock beat estimates and posted record net inflows. This is a great stock to keep a pulse on in order to feel the broader investment environment. CEO Larry Fink in an interview with CNBC this morning said, “We are paying so much attention to the political and geopolitical issues that we are losing sight that the world is still moving forward. The investment climate is not great, but not as bad as we feel every morning when we wake up.” Bank earnings were not the only ones leading the way this morning. UnitedHealth Group and Johnson & Johnson each beat estimates and the stocks are up more than 1% premarket.
Bill Baruch joined Bloomberg yesterday morning to discuss the market’s reaction to trade headlines and why he’s bearish on Crude Oil.
With all of that said, the Citi Economic Surprise Index which measures the pace in which economic data in the U.S is coming in above or below expectations roared higher through the end of Q3. In fact, although dissipating in recent weeks, the Index is coming off some of the best levels seen since Q1 2018. Inflation data from China last night was certainly not robust but overall was stronger than expectations. From Europe, German ZEW Economic Sentiment was still deeply pessimistic this morning but came in less-worse than expectations at -22.8 versus -27.0 expected. NY Empire State Manufacturing is due this morning, but the release looks to be delayed. Atlanta Fed President Bostic speaks at 8:00 am CT. September dissenter, Kansas City Fed President George speaks at 11:45 am CT. San Francisco Fed President Daly is at 2:30 pm CT.
Technicals: There was no immediacy in fighting the tape yesterday as price action remained stable with major three-star support in the S&P holding strong early and price action clinging to our pivots. Each the S&P and NQ couldn’t quite settle out above those pivots and these are levels we are still watching closely. For the S&P, first key support is settlement as there is not a small gap here at 2965.50; the first test should bring a quick trade opportunity. For the NQ, it is handedly out above the pivot which was 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.
Crude Oil (November)
Yesterday’s close: Settled at 53.59, down 1.11
Fundamentals: The broader risk environment is lifting Crude Oil from the depths of overnight weakness. We remain Bearish in Bias, however, our narrative has always been to not sell into new lows. Inflation data from China last night was underwhelming with CPI coming in stronger only due to pork prices. This morning, the IMF downgraded its growth forecast lowering China in 2019 from 6.2% to 6.1% and for 2020 from 6.0% to 5.8%. They also lowered global growth to a new post-crisis low of 3.0%. This is right in line with the softening demand forecast seen in 2020 by both OPEC and IEA through their Monthly Reports last week.
We are targeting 47.50 in Crude over the longer run. Bill Baruch joined Bloomberg yesterday morning to discuss the market’s reaction to trade headlines and why he’s bearish on Crude Oil.
Technicals: Overnight, Crude Oil sunk to a low of 52.39 and in a volatile tape bled through support at 52.55-52.74 for a brief 5-10 minutes but ultimately the level buoyed price action and Crude traded to a mid-morning high of 53.69. This high aligned closely with yesterday’s major three-star support which is now major three-star resistance aligning settlement and that spike high; the bears are in the driver's seat below ... 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 1497.6, down 8.9
Fundamentals: Gold and Treasuries are peeling sharply off their overnight highs as equity markets lift on upbeat earnings and NY Empire State Manufacturing beat expectations. The tape is ignoring IMF growth downgrades, but these revisions were to be expected. Standing out the most though was China’s 2020 GDP being revised from 6.0% to 5.8%. Overall, no negative news on U.S-China trade is good news, and this has reinvigorated positive sentiment broadly. Kansas City Fed President George speaks at 11:45 am CT today and here comments will be closely watched as she dissented in September. The odds of a cut later this month currently sit at 72%.
Technicals: Gold just could not do it; it could not hold above first key resistance at 1500.9 and this has led to technical weakness. Price action is now below the 1495.4 battleground and our momentum indicator at 1496.9. What matters most once again is major three-star support at ... 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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