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© 2017 by Blue Line Futures, LLC. 

Morning Express

November 25, 2019

E-mini S&P (December)

 

Last week’s close: Settled at 3111.50, up 7.50 on Friday and down 6.75 on the week

 

Fundamentals: Risk-sentiment is getting a boost to start the week after China promised to tighten intellectual property laws. IP has been a major hurdle in U.S-China trade talks and what we’ve referred to as the substance. China has been extremely reluctant to include it in negotiations, even saying at one point in October it would never be included. The nation now seems to have a change of heart announcing a plan to increase penalties on violations of intellectual property rights and is supposedly considering making it easier to hand down criminal punishments. This is a major step forward in trade talks and equity markets are responding, however, it hasn’t moved the needle on commodities such as Crude Oil and Copper. Today, the People’s Bank of China warned of financial risks and mounting economic headwinds due to trade in an annual report. Furthermore, the self-imposed deadline is nearing for Washington to implement a fresh round of tariffs on December 15th. Considering the smoke in mirrors jawboning we’ve become accustom to over these last two years of negotiations, although for face value China’s announcement is a considerable positive, we must still take it with a grain of salt until there is further proof.

 

The economic calendar for this holiday week is off to a slow start. Chicago Fed National Activity worsened in October to the lowest in more than three years. Tonight, Fed Chair Powell is expected to speak at the Greater Providence Chamber of Commerce annual dinner at 6:00 pm CT and traders should look for comments on monetary policy. Tomorrow brings housing data and Consumer Confidence. The odds of a hike at the Fed’s December 11th policy meeting are holding steady at 6%.

Technicals: After a healthy consolidation to finish last week, price action is firmly higher ahead of the opening bell. For the S&P, Friday’s settlement aligns with our momentum indicator to bring support at 3111.50-3114.25 and the tape is overall bullish in the near-term as long as it can hold out above here. Furthermore, the bulls have a clear advantage in setting fresh records into the close while holding our 3118.50 pivot. Similarly, we have support in the NQ at 8280.50-8295.75 and the bulls are in the driver’s seat holding above here. Still, there are overhead resistance levels and for the S&P it aligns the rising trendline from April that the market has yet to close out above with the record high bringing major three-star resistance at 3126-3132.50.

 

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Bias: Neutral

 

Resistance: 3126-3132.50***, 3165-3180***

 

Pivot: 3118.50

 

Support: 3111.50-3114.25**, 3095.50-3099***, 3086*, 3075.50-3077**, 3063.25-3069.25***

 

 

NQ (December)

 

Resistance: 8330-8341.50**, 8375.50-8384.25***

 

Support: 8280.50-8295.75**, 8233-8250***, 8207.25-8213**, 8150-8179.25***, 8090.25-8100**

 

 

 

 

Crude Oil (January)

 

Last week’s close: Settled at 57.71, down 0.81 on Friday and down 0.06 on the week

Fundamentals: Crude Oil slipped from two-month highs on Friday and is edging ever so slightly lower this morning despite a more upbeat U.S and China trade narrative that now supposedly includes intellectual property rights. There are hopes that the OPEC+ meeting next week will extend production cuts and raise compliance. As the committee fights dissipating demand growth and global economic headwinds, this has been a bullish factor ahead of the Saudi Aramco IPO.

 

Technicals: Price action stalled against our next wave of resistance at 58.64-58.93 and Friday’s retreat was met by the 200-day moving averages as support. This level comes in at 57.31-57.46 today and we must see a close below here in order to begin neutralizing the recent strength. Resistance comes in today at 57.71-57.94, this aligns settlement with our momentum indicator.

 

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Bias: Neutral

 

Resistance: 57.71-57.94**, 58.64-58.93**, 60.45***

 

Support: 57.31-57.46***, 56.90-57.05**, 56.01-56.20***

 

 

 

 

Gold (December)

 

Last week’s close: Settled at 1463.6, unchanged Friday and down 4.9 on the week

 

Fundamentals: With an upbeat U.S-China trade narrative that now includes some substance coupled with rising odds of a Fed hike next month, Gold continues to trickle lower. Do we think intellectual property is now fully included in trade negotiations? No. Do we think the Fed has any chance of hiking next month? No. This leads into our narrative of patience for buying Gold during this seasonally weaker time of year and as we prepare for a seasonally bullish time of year. Bill Baruch joined Bloomberg on Friday to discuss some of the ways we are playing Gold.

 

Technicals: Despite early gyrations higher on Friday off first key support, price action was lackluster at best through the second half of the day as equity markets finished on a strong note. Gold is testing major three-star support today at 1450-1454, as we remain longer-term bullish and near-term cautious we want to see how the metal responds on this most recent dip. Our momentum indicator aligns with settlement to create first key resistance.

 

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Bias: Neutral

 

Resistance: 1461.7-1463.6**, 1471.9-1474**, 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.

 

 

 

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