E-mini S&P 500 (June)
Yesterday’s close: Settled at 2745.50, up 11.75
Fundamentals: Major U.S. benchmarks are holding Monday’s gains and then some this morning after the Nasdaq Composite closed at a record high to start the week. Europe is leading this morning, the DAX is + 0.8% while Asia is muted. Traders want to keep an eye on Europe as Italy’s new PM Conte faces a bit of a confidence vote, though the coalition that appointed him has a majority. Spain’s Rajoy stepped down as expected after failing in his confidence vote. Italian yields have ticked up slightly. Eurozone Services and Markit Composite PMIs were a bit soft this morning and Retail Sales missed. The Dollar Index has regained the 94 mark; recent weakness in the Dollar has been supportive to equity markets. In the picture today is ISM Non-Manufacturing and JOLTs Job Openings at 9:00 a.m. Central. These two are the biggest pieces of U.S data on the calendar this week.
However, one should be keeping a close eye on EIA Crude Oil Inventories tomorrow after XLE shed another 0.9% yesterday and has weighed on the S&P. Services and Markit Composite PMIs are due at 8:45 am CT. Lastly, but certainly not least are the trade discussions. Concerns persist over the direction of U.S and China trade talks after the U.S envoy left Beijing with no formal deal and China has cautioned the White House against imposing new measures. Additionally, Friday’s G7 standoff is quickly approaching.
Technicals: The S&P 500 settled at and is now trading above first key resistance. Price action is not in the clear with major three-star resistance just overhead, coming in... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude oil (July)
Yesterday’s close: Settled at 64.75, down 1.06
Fundamentals: Crude oil is again lower this morning. Production is front and center as fresh U.S. data comes into the picture with the private API survey later today and the official EIA read tomorrow. Also, there are reports that the United States asked OPEC to raise output by 1 mb as their meeting in two weeks quickly approaches. Data for April shows OPEC output at the lowest level in a year. The EIA estimates U.S. production nearing 10.8 mbd, just under Russia’s 11 mbd. We maintain that a steady increase in U.S. production in the ballpark of 25,000 bpd per week is just about roughly priced in. Last week, 44,000 bpd were added. Additionally, pipeline constraints have caused a glut through Oklahoma and Texas which reflects in inventory data. Picking a bottom is a fool’s errand, however, with sentiment getting so negative and action from OPEC already priced in, a bottoming process should be underway soon enough.
Technicals: Price action failed to hold above $65 overnight and has traded to a new swing low this morning. The 100-day moving average comes in at 64.72 and aligns with 64.96 as a key area the bulls must see the tape regain in order to neutralize the immense weakness. Strong recoveries face major three-star resistance.
Yesterday’s close: Settled at 1297.3, down 2.0
Fundamentals: Gold has held ground well near the $1,300 per oz. mark given the strong data to finish last week. Though the Dollar Index remains about 1% from its recent high, Treasury yields have inched up in recovery after last week’s Italian crisis; these offset each other. However, Treasury yields are dissipating this morning just a slight bit as trade tensions are in the news and Italy’s PM faces parliament. Today brings the two biggest data points of the week at 9:00 a.m. Central in ISM Non-Manufacturing and JOLTs Job Openings. Services and Markit Composite PMIs come out first at 8:45 a.m. Central. Next week, the Fed, Bank of Japan and ECB each have policy meetings.
Technicals: Price action clung to first key support once again on a settlement basis. The metal is showing signs of technical potential but the strong barrier at major three-star resistance persists; a closeout above here will invite the buyers.
Natural gas (July)
Yesterday’s close: Settled at 2.93, down 0.032
Fundamentals: Price action is coming in a bit as bulls and bears battle between higher than average cooling days this summer and rising production. We have been adamantly Neutral against the $3 barrier, however, we maintain that there is value below the market.
Technicals: Price action has held well above 2.90 and we will be patient looking to use the first test to... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
10-year Treasuries (September)
Yesterday’s close: Settled at 119’16, down 0’11
Fundamentals: Price action is reinvigorated a bit this morning with Italy and Spain back in the news. There is one thing traders must remind themselves, especially those who tend to lean bullishly like us; the Fed is in a hiking cycle, the Fed meets next week, Treasuries have been a long-term bull market, there are hedge funds with a long-bias, those funds reduce long positions ahead of meetings since the Fed is in a hiking cycle. Our belief is the Fed will not hawkishly hike next week and that geopolitics will remain in the headlines, for this reason, dips are a buying opportunity. ISM Non-Manufacturing and JOLTs Job Openings are due at 9:00 am CT and Markit Composite and Services PMIs are due just before at 8:45 am CT.
Technicals: Price action managed to hug major three-star support on a settlement basis and is trading back above this morning. We favor... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.