Daily markets morning round-up: E-mini S&P, gold & crude

July 26, 2018 09:46 AM

E-mini S&P 500 (September)

Yesterday’s close (Wednesday,  July 25): Settled at 2841.25, up 20.25

Fundamentals: Yesterday was the definition of what we have been preaching all week. There are many themes playing out but none more important than earnings. The S&P 500 and Nasdaq began ripping higher into the close on news that President Trump agreed to suspend implementing tariffs on the EU, most importantly on autos, after meeting with European Commission President Juncker. The S&P 500 traded to the highest level since January 30th and the Nasdaq set another record. However, the enthusiasm was short-lived after Facebook disappointed on the earnings front and signaled it expected growth to slow through the end of the year; it is down 20% premarket this morning. Despite the late session melt-up, other big names who released earnings did not participate in the rise; Boeing and GM both finished in the red. This morning we look to Comcast, McDonald’s, Mastercard and many more. The heavyweight headline is after the bell with Amazon who after gaining 1.88% yesterday has become a casualty to Facebook and is down 1.25% premarket. That release will be joined by Intel and Starbucks. 

Traders must also keep an ear to ECB President Mario Draghi’s press conference. After the bank left policy unchanged and reiterated it will winddown QE by the end of the year, Draghi will be doing his best to keep the waters calm. Though it is unlikely we see his hand, we will be watching for any inclination that their first rate hike will be before or after September of next year. On the economic calendar, Durable Goods, Goods Trade Balance and weekly Jobless Claims are all due at 7:30 am CT. 

Technicals: Price action closed out above major three-star resistance at 2829.75-2833.25 and despite the Facebook thrashing, the S&P has remained extremely constructive through the overnight holding first key support at 2833.25 exactly. Given the significance of yesterday’s breakout on a technical basis, we now have major three-star support a ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

Crude oil (September)

Yesterday’s close: Settled at 69.30, up 0.78

Fundamentals: Yesterday’s headline EIA inventory report was bullish because it showed a larger than expected draw in crude, gasoline and Cushing, Okla. However, production estimates showed an increase of 100,000 bpd in the lower 48 states and while this large surge was offset by a drop in Alaska, it still shows total estimated U.S. production at 11 mbpd. The steady increase coupled with strong technical resistance (discussed below) and the beginning of a seasonal loll period, buyers could not take crude into the $70 handle. Price action did not react much to the U.S. and EU trade truce, however, the currencies and other risk assets did so favorably. Considering the entire landscape, a failure to move lower today will likely attract buyers into the weekend. 

Technicals: Strong major three-star resistance overhead at 69.66-69.93 has held price action back from regaining the $70 pe rbarrel mark. However, the bulls are in the clear near-term driver’s seat as long as price action stays above what was a previous barrier at the...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

Gold (August)

Yesterday’s close: Settled at $1,231.8, up 6.3

FundamentalsGold has again retreated from key technical resistance (discussed below) but a major factor is the stalled rally in the Chinese yuan. After yesterday’s strength, the currency is back within an earshot of the recent lows and the lowest level since July 2017. The ECB left policy unchanged and President Mario Draghi is getting underway with his speech this morning. The Euro will continue to play second fiddle to the yuan but nonetheless, it remains crucial. Yesterday’s truce on trade between President Trump and the EU rallied the Euro and supported gold into the overnight. Durable Goods, Goods Trade Balance and weekly Jobless Claims all came in light this morning and this should act as a supportive factor for the metal but the ECB this morning is a bigger focus than the data.

Technicals: Gold has remained constructive to the downside, holding our pivot level at 1225.8-1227.9 and this is absolutely crucial in keeping the bears from regaining the most immediate-term edge. Right now, the bears have positioned and unless price action closes below there, the risk is to the upside. The problem though is, the buyers are not showing strong belief yet and first key resistance at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

About the Author

Bill Baruch is President and founder of Blue Line Futures, a leading futures and commodities brokerage firm. Bill has more than a decade of trading experience and focuses on developing trading strategies for both long and short-term trading approaches. Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER.  Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications.