E-mini S&P (December)
Yesterday’s close: Settled at 3143, up 7.00
Fundamentals: U.S benchmarks are lingering at this week’s highs. Yesterday, the Federal Reserve stayed down the straight and narrow path that everyone expected, unanimously voting to hold rates steady. Fed Chair Powell reiterated this plan for the foreseeable future barring a drastic change to their ‘favorable’ outlook. Ultimately, the committee is begging for inflation and although there has been a large a divergence between inflation and unemployment, Powell pointed to this saying unemployment can go lower than previously thought. He also addressed those mounting yearend liquidity fears we discussed here yesterday saying the Fed may consider purchasing short-term coupon bearing securities. All in all, the Fed gave the market what it wanted, and the S&P stretched overnight to within a quarter tick short of Friday’s post Nonfarm Payroll run.
With the Fed in the rearview mirror, the U.K general election and today’s ECB policy meeting are front and center for now. With what is supposedly a very large turnout, we will hear updates as the day unfolds. As for the Euro, it held a meager 20 tick range through the expectedly uneventful policy meeting where the central bank left things unchanged. Newly appointed President Lagarde in her first meeting is due to speak at 7:30 am CT.
Once we get through the morning, the major focus into the weekend will be U.S-China trade and will they or won’t they implement fresh tariffs December 15th. China has done a terrific job in controlling the narrative this week, building anticipation for those tariffs to be delayed, inflating the market in order to pressure the White House to abide. However, Washington seems much less enthusiastic about this delay. The ante is certainly higher this round as talks would quickly fall apart and likely through the 2020 U.S election if those tariffs of 15% on $160 billion of Chinese goods are implemented.
U.S PPI data was soft this morning and tomorrow we look to a critical read on November Retail Sales.
Technicals: Price action in both the S&P and has stayed directly contained by first key resistance at 3146.50-3151 and 8400-8427.25. For the S&P, we will split these levels today in order to define the trend line from the December 2nd high and align it with yesterday’s settlement and separately emphasize this session’s overnight high and align it with last Friday’s melt-up pause. As for the NQ, it has also stayed contained by first key resistance but holding out above our 8384.75 pivot has been undeniably constructive. Ultimately, as long as each continues build solid footing at supports, the bulls will maintain the drive’s seat. More broadly though, intermediate-term, until we get a ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary level emailed to you early each morning.
Crude Oil (January)
Yesterday’s close: Settled at 58.76, down 0.48
Fundamentals: I feel like Bill Murray in Groundhog Day, for the fourth day in a row Crude Oil is sitting at the $59 mark at 8:00 am CT. However, it’s not ‘I Got You Babe’ playing to start the same day over again and instead its President Trump tweeting, “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”
Today, the IEA released their Monthly Report and although they still expect a surplus of 700,000 bpd in the first quarter. Although this is in direct contrast to OPEC’s expectations of alleviating the glut, the IEA did revise this lower by 200,000 bpd from last month. The report, although slightly bearish over the intermediate to longer-term, has fairly neutral given the revision. Instead, its President Trump’s tweet driving Crude Oil back to the top of its recent range. This landscape will be headline driven into tomorrow’s close as we look to whether or not those December 15th tariffs are implemented.
Yesterday’s EIA report was bearish with larger than expected builds in the products and a build versus an expected draw in Crude Oil. However, a slightly dovish and patient Federal Reserve has buoyed risk-sentiment and after pinging strong major three-star support at $58 post-EIA, Crude Oil has found the Fed favorable.
Technicals: We’ve been Neutral in Bias saying we want to fade rallies. Well, we have a rally on our hands post-Trump tweet and major three-star resistance comes in at 59.85-60.45. This level aligns a trend line from the January contract high in April and stopped Friday’s move in its tracks. However, steady price action and a close above ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary level emailed to you early each morning.
Yesterday’s close: Settled at 1475, up 6.9
Fundamentals: After trading to a high of 1491.6 this morning, a tweet from President Trump saying, “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” has completely reversed the tape. Additional details are trickling out on delaying the December 15th tariffs and rolling back current tariffs by as much as 50% in what has the makings of an interim “Phase One” trade deal. Gold has reversed all gains and now trading in the red. The day is just getting going and will be completely headline driven at this point.
Technicals: The metal stuck its nose out above major three-star resistance at 1484.9-1486 for a cup of coffee. With price action slipping, support now comes in at 1469.2-1474, and with a brief low hitting 1468.9, we must see this support hold or the door again is open for a retest into what is now our first wave of 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 level emailed to you early each morning.
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