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E-mini S&P (December)
Yesterday’s close: Settled at 3118.50, down 3.25
Fundamentals: U.S benchmarks are experiencing the healthiest of healthy pullbacks. Price action slipped from record highs early yesterday in this low volume environment as a bulk of retail stocks lingered lower following Home Depot which lost 5.44% after reporting underwhelming earnings and lowering guidance. The consumer has fueled the economy this year and we’ve discussed that any signs of exhaustion in retail earnings could have a broadening impact on the market. Today, the sector is signing a different tune with Target and Lowe’s both posting beats and showing premarket gains of 10% and 4% respectively. The energy sector also lost ground with the big names down more than 1% and the smaller independents getting tagged for more than 2%. Crude Oil lost 3.1% yesterday and although U.S equity benchmarks extended gains into yesterday morning despite a softening narrative around U.S and China trade, Crude was more in tune with such.
That U.S and China trade narrative is ultimately what’s pressuring benchmarks a bit ahead of the opening bell. Yesterday, the U.S Senate unanimously passed the ‘Hong Kong Human Rights and Democracy Act’. The bill aimed to protect human rights goes to the House of Representative which passed their own version last month. The move has angered China, further dented dissipating trade hopes and the country has promised to retaliate if the bill becomes a law.
On the economic calendar, we look to Crude Oil inventory data at 9:30 am CT as the only piece of U.S data this morning. At 1:00 pm CT, the Fed releases the Minutes from their most recent meeting and rate cut. With the odds of a fourth cut tallying a whole percentage point this year in December less than 1.0%, today’s Minutes will give some insight into 2020 which likely eludes to a less dovish committee.
Technicals: We neutralized the cautiously Bullish Bias we’ve had for weeks on Monday and have reiterated longs should ring the register at what were new records. Although we are not introducing a Bearish Bias, we see value in trying to capture downside and there are a number of ways to do it, you can call Bill Baruch directly at 312-837-3944. Price action again did not close out above 3122 yesterday and we will look to this level to align with settlement and create first key resistance. Given that the tape nearly tested 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.
Crude Oil (January)
Yesterday’s close: Settled at 55.35, down 1.79
Fundamentals: Crude Oil is working higher this morning on news Russia plans to comply with its OPEC+ pact for November. It’s widely known Russia has overproduced relative to its OPEC+ ceiling and news yesterday that they are unlikely to agree to deepen cuts helped fuel the downside. Given that it is already November 20th, this would seem more like jawboning than anything, however, Saudi Arabia is almost certainly pressuring Russia to keep prices stable ahead of the Saudi Aramco IPO.
EIA inventory data is due at 9:30 am CT and yesterday’s private API survey was actually bearish. They reported +5.954 mb Crude, +3.354 mb Gasoline and -2.19 mb Distillates. This certainly sets a bearish bar relative to EIA expectations, but we’ve also discussed the dissipating impact of this private survey. Analysts expect the official results to be +1.543 mb Crude, +0.87 mb Gasoline and -0.732 mb Distillates. Traders should keep a close eye on the composite results relative to the composite EIA expectations.
Today’s overall finish will be interesting and help define whether Crude Oil ultimately rejected lower prices and what type of weight the OPEC narrative will carry over the next two weeks.
Technicals: Crude Oil finally took out major three-star support at 56.01-56.20 and the flood gates opened to a low of 54.85 overnight. Price action did not quite get to a trend line at 54.60 which aligns to create major three-star support at 54.38. We had three waves of major three-star support with the other being 55.27 and ultimately Crude did not settle below here yesterday. Today’s momentum indicator comes in at 55.63 and price action is above here and is moving towards what is now major three-star 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 day.
Yesterday’s close: Settled at 1474.3, up 2.4
Fundamentals: Gold is holding ground but just cannot find the catalyst to extend gains. Who can blame it with equity markets and risk-sentiment lingering at such elevated levels amid dissipating odds of additional Fed cuts? Today, the Fed releases the Minutes from their most recent rate cut meeting at 1:00 pm CT and this promises to invite volume to what is otherwise becoming a consolidation week.
Technicals: Resistance at 1471.9-1474 continues to be a hurdle and although the tape sticks its neck above here it is exhausted in doing such and faces strong major three-star 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 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.