E-mini S&P (March)
Yesterday’s close: Settled at 3260.25, up 25.00
Fundamentals: U.S benchmarks surged to fresh record highs on the deescalation of U.S-Iran tensions. U.S benchmarks have not looked back since President Trump’s speech yesterday morning signaling diplomacy over war. Neither side wants war; we’ve covered this belief in great detail from our interview with Bloomberg Tuesday, yesterday’s Morning Express and Midday Market Minute. In fact, many times relations must be completely torn down, or at least appear so, in order to rebuild. This situation is not completely in the rear-view mirror but in the coming days, weeks and months it will be important to keep a pulse on continued developments. For now, the deescalation has put equity markets back on track to where they were on the January 2nd close; surging higher. Adding a tailwind is news that top Chinese negotiator Liu He plans to travel to Washington for the signing of the lauded “Phase One” trade deal January 15th. Weekly Jobless Claims came in better than expected this morning. Fed Vice Chair Clarida said this morning the U.S expansion is robust and there is no reason to think it cannot continue. He added that a recession is not imminent and last year’s rate cuts were “well timed” and monetary policy is in a good place for 2020. New 2020 voter, Minneapolis Fed President Kashkari, is due to speak at 8:30 am CT. Permanent voter, NY Fed President Williams, speaks at 10:30 am CT and Chicago Fed President, who is not a voter this year but was last year, speaks at 1:20 CT. Do not forget, Nonfarm Payroll is due tomorrow at 7:30 am CT.
Technicals: The path of least resistance for equity markets is higher unless there is a fundamental geopolitical derailment. The S&P closed at and quickly chewed through our upside target major three-star resistance at 3259-3264 which had previously held rallies in check. The NQ is testing our next strong major three-star resistance upside target of 8995.50-9000. Overall, this momentum cannot be denied, but pullbacks from current levels to test our Pivots which now align with gaps from yesterday settlement is a realistic buy objective on the session. However, a failure for the S&P to close above ... Please sign up for a Free Trial at Blue Line Futures to have our enture technical outlook, actionable bias and proprietary levels emailed to you each morning.
Crude Oil (February)
Yesterday’s close: Settled at 59.61, down 3.09
Fundamentals: What a day. Crude Oil traded in a 10% range and after tagging the highest level since last April, it closed at nearly one-month lows. The U.S-Iran narrative is playing out closely to how we anticipated; a deescalation after Iran saved face, appeasing its country in retaliation but not causing any significant damage or harm. Furthermore, President Trump’s speech yesterday morning which chose diplomacy over war further pressured Crude Oil, sending it back below the psychological $60 mark. He added the U.S will impose new economic sanctions on Iran, but ultimately, we do believe a potential new Nuclear Deal could be in the making. This would add Iranian Oil to the market.
Yesterday’s EIA report added pressure to an already slipping tape. The headline Crude build was less than the private API survey, but a build nonetheless compared to -3.572 expected. However, it was the products coming in at a combined build of 14.467 mb that truly added that pressure.
Lastly, although risk-sentiment is broadly strong – equity strength and treasury weakness, the Dollar is also strengthening which does not bode well for commodities in the intermediate-term. Especially commodities such as Crude Oil and Gold that experienced exacerbated moves.
Technicals: We came into yesterday with a slight Bearish Bias for a number of reasons, described this week and last. We are not increasing our Bearish Bias because we still feel vigilance is necessary. Price action remained contained overnight by our momentum indicator at 60.32; below here the bears are in the near-term driver’s seat. Furthermore, price action has chewing through major three-star support at 59.74-59.84 and this opens the door for a move down to ... 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 morning.
Yesterday’s close: Settled at 1560.2, down 14.1
Fundamentals: Gold is down sharply as U.S-Iran tensions have been deescalated. Once this happened, additional pressures have been added by stronger than expected economic data over the last three mornings, beginning with ISM Non-Manufacturing Tuesday, ADP Payrolls yesterday and Weekly Jobless Claims today. Furthermore, Vice Fed Chair Clarida was upbeat on the U.S economy and we now look to Minneapolis Fed President Kashkari, a 2020 voter, at 8:30 am CT, permanent voter, NY Fed President Williams, speaks at 10:30 am CT and Chicago Fed President, who is not a voter this year but was last year, speaks at 1:20 CT. Lastly, do not forget, Nonfarm Payroll is due tomorrow at 7:30 am CT.
Technicals: Despite a Bullish Bias as long as Gold maintained a close above 1566.2-1571.7 and stayed buoyed by support as low as 1549.9-1552.4, we pounded the table that traders MUST capitalize on this rally beginning Sunday night. Price action will remain susceptible to waves of selling while below our pivot of 1555.2-1558.4 which aligns multiple indicators including our momentum indicator. However, if the bulls can defend those waves of selling at 1552.1-1552.4 there is hope, but hope is not a trading strategy. Below this major three-star support the door is open to ... 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 morning.
Sign up for 1 or all 4 of our daily Blue Line Express commodity reports!
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.