E-mini S&P 500 (September)
Yesterday’s close (Thursday, Jully 12): Settled at 2798.50, up 24.50
Fundamentals: The S&P 500 closed at the highest level since Feb. 1 for the second time this week and extended gains overnight, this is surely a breakout isn’t it? Not so fast, we will discuss this in the technical section below. Global equity markets are all higher and being led by the Nikkei, which is up almost 2%, about half of which came during yesterday’s U.S. hours (Nikkei futures are up about 1%). This strong 48-hour move comes as the Japanese yen has completely broken down through long-term technical support. Today is the unofficial kickoff of earnings season being led by JP Morgan who beat across the board and is up 0.75% pre-market. Citigroup and Wells Fargo are on deck this morning. Trade tensions sure have not gone anywhere, but the market doesn’t care. Treasury Secretary Mnuchin said yesterday that many of their talks with China have broken down. Well, this explains the announcement of the third-round worth $200 billion in tariffs. However, markets continue to focus on the inkling that China wants to reopen discussions as they are running out of ammo to retaliate with. This was seen further last night with the S&P extending gains and the NQ trading to a new all-time high despite Chinese Trade Balance data showing a record surplus with the U.S. While headlines from President Trump’s European trip and those on trade will be crucial as the week winds down, we are also closely eyeing the fresh July read on Michigan Consumer data. This is due at 9:00 am CT and is the most up-to-date economic data point released.
Technicals: Yesterday, the S&P faced the recent 2797.75 swing high and was able to punch through, leaving the bulls clearly in the driver’s seat. Price action traded to an overnight swing high of 2807.25 and it is likely we see this level retested early in today’s session, however, it provided a great sell opportunity for those who have been following our levels. The S&P has not a broken out just yet and traders must be aware of our rare major four-star resistance at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude oil (August)
Yesterday’s close: Settled at 70.33 down 0.05
Fundamentals: Congratulations to those who followed us on our buy at $69.33 to $69.38 per barrel, yesterday’s low was $69.23 and you had an opportunity to take a dollar out of the trade yesterday while price action is even higher this morning. We exuded extreme patience, going outright Neutral for the first time in almost a month ahead of Wednesday’s EIA inventory report when Crude was trading just below $74. Our intermediate to long-term outlook remains bullish and we continue to believe spare capacity has its back against the wall while OPEC will not be able to ramp up production to meet raised expectations. Furthermore, U.S shale has not added production over the last few weeks at the pace we saw in May through June. Still, there are question marks and that is why risk must be managed properly. Will the United States give exemptions to countries for Iranian Crude? Will China use U.S. crude to retaliate in the trade war? Will global growth and thus oil demand come to a halt due to trade tensions?
Technicals: Price action traded right into our buy target at major three-star support at 69.33-69.38and settled at dollar from the level. The bulls are in the driver’s seat with price action above the pivot at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterday’s close: Settled at 1246.6 up 2.2
Fundamentals: Gold traded to the lowest front-month level since July 20 this morning as the dollar is strengthening against all major currencies. Most importantly, it is back at recent swing highs against the Chinese Yuan. The Euro is also at the lowest level since the first day of the month. Today, we look forward to the fresh July preliminary read on Michigan Consumer data, this is the most up-to-date data point available. It will give us a look into the consumer with trade fears in the headlines, a miss here would go a long way in helping gold form a reversal on today’s session.
Technicals: Price action traded to a low of $1,236.2 per oz., nudging just below our rare major four-star support before lifting. This level will remain crucial on a closing basis and ultimately, we must see Gold close back above 1247.9-1248.8, making a new high on today and yesterday, in order to neutralize this weakness. We expect fresh buying to come in above... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.