E-mini S&P 500 (September)
Yesterday’s close: Settled at 2850, up 10.50
Fundamentals: All major benchmarks around the world are in the green. Momentum domestically has been undeniable as the S&P 500 closed Monday at the highest level since Jan. 29 and is nearly 1% from a record this morning. However, it is China that is joining the party with the Shanghai Composite up 2.74%. The yuan is attempting to stabilize, and this aided China’s major index in posting its best gain in two years, cutting its YTD loss to 15.96%. With major U.S. benchmarks eyeing new all-time highs, a reprieve in China coupled with strong trade numbers from Germany, we have a robust global picture on our hands this morning. Still, traders and investors alike must keep an ear to the ground on developments on trade relations with U.S. and China just as snapback sanction on Iran were reinstated today. The earnings calendar is starting to wind down, but Disney headlines the week and is due after the bell. On the economic data front, JOLTs Job Openings is due at 9:00 a.m. Central.
Technicals: Price action achieved what we have been calling for, a close above first key resistance at 2849.50; as we said in yesterday’s Midday Market Minute, this is a bull breakout and the firm tape overnight has kept the strong momentum intact. Without any fundamental landmines getting tripped, there is no reason to believe that the S&P 500 will not set a new record high before the end of the week. We are outright bullish as long as price action maintains a close above... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude oil (September)
Yesterday’s close: Settled at 69.01, up 0.52
Fundamentals: Yesterday’s close was not pretty and a televised interview with Iran’s President Rouhani, inventory expectations trickling out and pure technicals could all be credited to the reversal. Rouhani attempted to strike a chord yesterday, essentially playing victim and this arguably worked considering the timing of his comments and the dissipation in the market. However, major three-star resistance held, and we believe the catalyst of the reversal to be more profit taking than anything. Still, price action has snapped back this morning after the sanctions on Iran for just about everything but crude oil have been implemented. President Trump called these “the most biting sanctions ever imposed”. They include U..S dollar purchases, metals, industrial-specific software and more. Crude oil is trading higher as these sanctions add to already heightened geopolitical tensions but sanctions on Crude will not go into effect until November. API is due out after the bell today.
Technicals: Price action is very firm this morning and retesting major three-star resistance after hitting it exactly yesterday before falling back. A close above ... 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 1217.7, down 5.5
Fundamentals: Gold lost significant ground yesterday after holding firm from Friday through Sunday night. The U.S dollar strengthened yesterday against all major currencies and most importantly the Chinese Yuan. This pushed Gold back down to Friday’s low and the lowest level since last July. However, the Dollar strength and thus Yuan weakness is paring back and bringing support to the metal into this morning. We continue to watch this relationship very closely and believe there is a light at the end of the tunnel. While gold has traditionally been called a safe-haven, we are essentially seeing the exact opposite right now. The Shanghai Composite had its best day in two years overnight as gold strengthened. Furthermore, early last week Gold bounced on news that the U.S and China restarted trade talks. Though gold remains a safe haven in most other aspects, it is not due to trade tensions; we are looking for Gold to be a key beneficiary when the U.S and China trade spat is figured out; this would thus strengthen the yuan as speculation would mount that China would stop devaluing the Yuan to make their exports more attractive. Keep an eye on JOLTs Job Openings today at 9:00 a.m. Central.
Technicals: As a record short position mounts, us bulls can only eye the resistance levels that would begin to force these shorts to cover. While first key resistance at 1227-1228.5 has been a strong headwind, we must see a move above... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.