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E-mini S&P (December)
Last week’s close: Settled at 3118.25, up 21.25 on Friday and up 27.75 on the week
Fundamentals: Major U.S benchmarks achieved a fresh wave of record highs this morning before paring gains as trade anecdotes drive the two-sided tape. It was revealed that U.S Treasury Secretary Mnuchin, U.S Trade Representative Lighthizer and Chinese Vice Premier Liu He had a “constructive” phone conversation Saturday as the two sides move closer to an interim “Phase One” trade deal. Upbeat comments out of China this morning added the fuel for latest surge and the S&P traded 3127.75. However, a tweet from CNBC reporter Eunice Yoon threw cold water over the early exuberance as she detailed the “mood in Beijing on trade is pessimistic and troubled after Trump said no tariff rollback”. Ahead of the open, we can see that the trade narrative is front and center and any confirmation out of Washington that the
White House is willing to rollback tariffs will almost certainly boost the market to record levels.
With U.S benchmarks at record highs, Bill Baruch joined CNBC’s Trading Nation to discuss attractive stocks.
Retail earnings and the consumer are in the spotlight this week, here is a preview.
In other news, Hong Kong protests continue to make headlines as the police battle students at the city’s university. The German Bundesbank reported that the economic slowdown will likely continue into the first quarter, however, they are exuding that the worst is in. In fact, one could assume they see things turning a corner sooner than later. There is no early economic data from the U.S but we look to NAHB Housing at 9:00 am CT, Cleveland Fed President Mester at 11:00 am CT, she is a 2020 voter, and TIC data at 3:00 pm CT.
Technicals: With record highs across the board on Friday, what’s next? Well the S&P closed out above 3115, a level that became a marker for us amid a rising trend line from April, but that rising trend line does not come in at 3115 anymore. Arguably its 3122 and today we will align 3122 with our next key overshoot level of 3128.25 as major three-star resistance. Our pivot will come in just below where that previous 3115, which we still find it important, aligns with Friday’s settlement and our momentum indicator; sustained price action below here could easily encourage a wave of profit taking back to first major three-star support at 3095.50-3099 which hold Thursday’s gap settlement. For the NQ, major three-star resistance at 8375-8384.25 kept a lid on the overnight rally. The pivot is Friday’s settlement but aligns closely with our momentum indicator. First key support is the round 8300 which proved to be a solid marker last week. Still, we would assume that sustained price action below 8318.75 would lead to a retest to major three-star support at 8250-8265.50 which aligns multiple technical indicators with the rising trend line from April, however, we have kept it more closely tied to Thursday’s settlement which still holds a gap. We are now outright Neutral and completely reducing our cautiously Bullish Bias, longs who have traded this move should ring the register and watch a round our two.
Resistance: 3122-3128.25***, 3165-3180***
Support: 3095.50-3099***, 3086*, 3075.50-3077**, 3063.25-3069.25***
Support: 8300**, 8250-8265.50***, 8207.25-8213**, 8150-8179.25***, 8090.25-8100**
Crude Oil (January)
Last week’s close: Settled at 57.83, up 0.95 on Friday and up 0.57 on the week
Fundamentals: Crude Oil is being wagged by the broader risk-environment which ultimately is the U.S and China trade narrative. Price action was lingering at or above Friday’s high, the highest in nearly two months, before reports of pessimism in Beijing on trade because President Trump does not plan to rollback tariffs. The other driving force for Crude Oil in the intermediate-term is speculation as the December 5-6 OPEC meeting nears. In their Monthly Report last week the group pointed to falling demand in 2020, however, we continue to hold a belief that its easy for Saudi Arabia to jawbone additional cuts ahead of the Aramco IPO but we don’t see it happening with Brent trading above $60, it is 62.80 this morning.
Technicals: The expiration of December options on Friday helped lift what had become a ceiling at the 200-day moving averages. Friday was the first clear settlement above such since price action began slipping sharply September 24th. This level remains crucial today as we roll from the December contract into the January. Do the bulls hold an advantage when the front-month shift settles here today? Now, our momentum indicator comes in at 57.64 and sustained price action below here today will dissipate the bull’s budding advantage.
Resistance: 57.64-57.83**, 58.22-58.32**, 59.11***
Support: 56.75**, 56.01-56.20***, 55.72-55.90**, 54.61-54.94***
Last week’s close: Settled at 1468.5, down 4.9 on Friday and up 5.6 on the week
Fundamentals: Gold surged on the aforementioned tweet by CNBC reporter Eunice Yoon that Beijing is becoming pessimistic on trade. The metal has gained 1% from session lows and although this is a fundamental swing, the technical tailwind upon such a reversal mustn’t go unnoticed nor be underestimated. There was no early economic data from the U.S but we look to NAHB Housing at 9:00 am CT, Cleveland Fed President Mester at 11:00 am CT, she is a 2020 voter, and TIC data at 3:00 pm CT. Equity markets at record levels has certainly hindered Gold of late, but one needs to look at the broader uptrend and the impending seasonality as an opportunity to buy upon weakness. Bill Baruch joined CNBC’s Fast Money at the Nasdaq in Times Square to lay out why he’s buying Gold and one way to play it. Remember, we are here to discuss a trading strategy to best suit your needs, call us at 312-278-0500.
Technicals: Gold settled constructively above 1462.6-1463.6 Friday, but the recent downtrend continued to weigh on the tape into this morning. Price action pinged major three-star support at 1450-1454 again this morning before reversing sharply and is now testing key resistance at 1469.3-1474. Such a reversal given that this is arguably the third test here should now provide a tailwind into major three-star resistance at 1482.6-1484.5
Resistance: 1469.3-1474**, 1482.6-1484.5***, 1491**
Support: 1450-1454***, 1446.2*, 1413.2***
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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.