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Morning Express

October 31, 2019

E-mini (December)


Yesterday’s close: Settled at 3047.75, up 12.00


Fundamentals: U.S benchmarks surged to fresh records late yesterday after the Fed cut rates and upon strong earnings from Facebook and then Apple. Fed Chair Powell and the committee threaded the needle on what was an expected cut by softly signaling this could be the last during the “mid-cycle adjustment”. Powell did a great job shifting the focus from additional cuts onto the reluctance of raises in the future, “We would have to see a significant and persistent uptick in inflation before we would consider raising rates to address inflation concerns”. The odds of a cut next month remain just above 20% and the market is happy with this and for good reason; GDP was better than feared and earnings have been a bullish catalyst. Facebook was the latest, topping estimates across the board after the bell yesterday; the stock is up 4% premarket. Apple beat top and bottom line estimates and was very optimistic looking to the holiday season; the stock is up 1.6% premarket.


All is not perfect though with U.S and China trade still the elephant in the room. Chile cancelled the Asia-Pacific Economic Cooperation (APEC) summit yesterday; President Trump and President Xi were expected to sign an interim trade deal there. The S&P quickly fell 10 points to major three-star support, a level we called a “strong buy” here yesterday, before quickly bouncing. The market largely ignored this hurdle yesterday amid the aforementioned broader bullish focus but received additional tailwinds overnight as news trickled out the U.S was considering extending tariff exclusions expiring December 28th. China threw cold water over those headlines though when officials said early this morning they doubt being able to reach a comprehensive long-term deal. Furthermore, it was revealed they’ve shown unwillingness to budge on much of the substance. Still, equity markets are broadly ignoring these negative headlines and holding ground at unchanged at the onset of U.S hours.


Last night, Chinese Manufacturing PMI was the lowest since February, contracting at 49.3. Eurozone GDP and CPI were a steady to a tenth stronger. The Fed’s preferred inflation indicator the Core PCE Price Index came in at 1.7%, below the 2.0% target. However, weekly Initial Jobless Claims came in higher than expected ahead of tomorrow’s Nonfarm Payroll.


Technicals: All in all, there is nothing to fight here; this has been our narrative as we remain cautiously Bullish in Bias. Our intermediate-term upside target in the S&P at 3046.50-3057.75 and in the NQ at 8150-8179.25 have ultimately been achieved but pullbacks are shallow, constructive and defended by buyers. Yesterday’s swift move to our “strong buy” target of 3020.25-3022.75 was exactly that. Still, our Bias is cautious as we must remain headline vigilant. The most immediate support level comes in 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)


Yesterday’s close: Settled at 55.06, down 0.48


Fundamentals: Yesterday’s EIA inventory report was bearish, headlined by a surprise build of 5.702 mb of Crude Oil. Yes, the products did offset some of this but on a composite basis this was a build of nearly 2 mb when a draw of 2 mb was expected. Crude fought the weakness to follow the broader risk-environment higher post Fed meeting and on rumblings of a potential U.S pipeline leak. Despite the worst Chinese Manufacturing PMI last night since February, Crude was holding strong and tested a high of 55.59, against resistance. Price action turned sharply lower on the headlines of Chinese officials doubting the long-term sustainability of a trade deal. And there we have it, finally some follow through on our Bearish Bias; a close below key technical levels will make us increasingly bearish.


Technicals: We remain Bearish, but the market has not been able to close below our line in the sand major three-star support to reinvigorate what we feel is bearish trend. This level comes in at 54.61-54.99 and upon such, we below the door is open to ...  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.





Gold (December)


Yesterday’s close: Settled at 1496.7, up 6.0


Fundamentals: Gold is surging higher this morning and the continued dismal data has added a tailwind, but the true spike came upon reports that Chinese officials doubt the long-term sustainability of a trade deal. Furthermore, it really seems China has no intent in following through with a bulk of the substantial issues. As for that data; Chinese Manufacturing PMI, weekly Jobless Claims and Chicago PMI all missed. What helped lay the groundwork here though was yesterday’s price action against strong support amid what was initially seen as a hawkish Fed cut. Fed Chair Powell threaded the needle though saying the committee does not plan to raise rates unless inflation was significantly higher persistently. The Fed’s preferred inflation indicator the PCE Price Index was 1.7% versus 2.0% this morning. The last foreseeable near-term hurdle for Gold is tomorrow’s Nonfarm Payroll and ISM Manufacturing.


Technicals: Gold is through the 1499-1503.2 barrier and this also aligns with our momentum indicator today. We are Bullish Gold while it holds out above here. Still, strong resistance comes in at 1515.6-1518. In recent weeks, Gold has quickly become exhausted once achieving a strong wave of resistance all the way up to ...  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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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.



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