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Morning Express

November 6, 2019

E-mini S&P (December)

 

Yesterday’s close: Settled at 3072, down 3.75

 

Fundamentals: Yesterday brought a reprieve from this bullish breakout and U.S benchmarks settled marginally lower as they test into major three-star support. The news cycle is overall quiet at the onset of U.S hours and there isn’t any fresh U.S and China trade jawboning to ignite a fire under what has been a path of least resistance higher. Equity markets across the world seem to be in the same holding pattern this morning despite economic data being a bright spot for once. German Factory Orders increased by 1.3%, the biggest jump in three months. Final October PMI data regionally and for the Eurozone was overall a bit better than expected and Retail Sales was also a steady read. On the U.S calendar, we look to a slew of Fed speak beginning with Chicago Fed President Evens at 7:00 am CT, NY Fed President Williams at 8:30 am CT and followed by Philadelphia Fed President Harker at 2:15 pm CT. While the NY Fed President remains a continuous voting member, Chicago’s Evans votes in 2019 and Philadelphia’s Harker votes in 2020. Nonfarm Productivity is due at 7:30 am CT, weekly EIA Inventory is out at 9:30 am CT and we look to a 10-year Note auction at noon.

 

Technicals: Price action in each the S&P and NQ is holding very well above out major three-star support levels at 3063.25-3069.25 and 8150-8179.25. This is extremely positive for the bull camp and given recent direction it should point to a reinvigoration of the uptrend before NY lunch hour. Price action is now below our pivots that align settlement with our momentum indicator, holding steady out above here will certainly encourage such a tailwind of buying. However, a failure to respond at our major three-star support into the later part of the afternoon will signal ... 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 day. 

 

 

 

 

 

Crude Oil (December)

 

 

Yesterday’s close: Settled at 57.23, up 0.69

 

Fundamentals: Inventory data is in the crosshairs this morning, but not if Saudi Arabia can have anything to do with that. Last night, the private API survey, which has had less and less of a market impact, posted a larger Crude build than estimates at 4.26 mb but much of this was offset by a larger draw in Gasoline and Distillates at 4.0 mb and 1.6 mb. Estimates for today’s official EIA data are +1.515 mb of Crude, -1.809 mb Gasoline and -0.949 mb Distillates. Traders also want to keep a close eye on production estimates. Although U.S production has leveled off, it is still sitting at an estimated record high of 12.6 mbpd. OPEC Secretary General Barkindo made sure to point to this fact yesterday. It was reported, initially by the Wall Street Journal, that Saudi Arabia wants to turn up the pressure on OPEC members for additional production cuts. They want to use this tactic to exude their control ahead of the Aramco IPO. However, they do not want to bear the burden themselves which means they may not get too far with Brent trading above $62; this aligns with our narrative.

 

Technicals: Price action has continued to struggle at the 200-day moving average into this morning; major three-star resistance at 57.23-57.40 today. Our momentum indicator comes in at 57.05 right now and a continued trade below here could quickly lead to a wave of profit taking. While today will be more fundamental in nature, the lines in the sand are drawn with the 200-dma overhead and major three-star support 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 day. 

 

 

 

 

Gold (December)

 

Yesterday’s close: Settled at 1483.7, down 27.4

 

Fundamentals: In the fashion of getting kicked in the face by a steel toe boot, Gold played catchup to Treasuries and the Dollar yesterday ahead of and into a stronger than expected ISM Non-Manufacturing read (maybe someone knew something). Price action is again battling at a crucial level of support and today’s economic calendar will provide some guidance; Chicago Fed President Evens at 7:00 am CT, NY Fed President Williams at 8:30 am CT and followed by Philadelphia Fed President Harker at 2:15 pm CT. While the NY Fed President remains a continuous voting member, Chicago’s Evans votes in 2019 and Philadelphia’s Harker votes in 2020. Nonfarm Productivity is due at 7:30 am CT and we look to a 10-year Note auction at noon. Still, equity markets are at record highs, the U.S-China trade front remains upbeat and the odds of a cut in December are gyrating between 5 and 10%. The bulls can hang their hat on a better than 33% chance the Fed cuts again by March and this is why 2020 Fed voters must be watched more closely in the coming weeks.

 

Technicals: Gold is again trading at and responding to major three-star support at 1484.5-1490.7. This is at least the fifth such test since the October 1st washout. The range has been well-defined between this support and 1520 resistance roughly speaking. The only problem here is that the ...  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 day. 

 

 

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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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