E-mini S&P 500 (September)
Yesterday’s close (Tuesday, Aug. 7): Settled at 2859.75, up 9.75
Fundamentals: U.S. benchmarks are steady this morning and the S&P is within 1% of its all-time high. Our outright Bullish stance has paid off, but key technical resistance sits overhead (discussed in the ‘Technical’ section below). The Nasdaq is also within 1% of its record high and both levels should be watched closely, we have called for these to be achieved before the end of the week. Yesterday’s push higher was more mixed among the bigger names with Apple paring recent gains, Facebook in the red and Consumer Goods and Healthcare lagging. Earnings season has begun to wind down and the overall numbers have been good and should act as a near-term tailwind during this quieter week. U.S and China trade remains in the headlines. The White House announced the second wave of 25% tariffs on $16 billion of Chinese goods is due to be imposed on Aug. 23. Also, Trade Balance data from China last night showed exports rising faster than expected and China’s surplus with the U.S saw only a minor reduction to $28.09 billion in July from $28.97 billion in June. On the bright side, the faster than expected pace of both exports and imports is a signal of steady and even strong demand, however, the news as a whole means less favorable headlines. Still, we maintain that until the third wave of $200 billion is imposed, the trade tensions have actually “dovened” the perception of Federal Reserve policy and in turn has been a bullish catalyst for equity markets. This will hit the limelight Friday with a critical read on U.S. CPI. Where, in this aforementioned quieter week, a favorable number could encourage a broad rally with participation from all big names trekking through record highs. Lastly, traders should remember that the S&P has traded higher for four straight sessions, some consolidation ahead of Friday is to be expected.
Technicals: We remain outright Bullish in Bias because of the bigger picture through the next several trading sessions. However, with first key resistance sitting at 2864.50, yesterday’s high testing it head on and overnight price action failing to chew through, some consolidation is not abnormal and is even healthy after a 2% rally since our major three-star support at 2789.74-2792 was tested, held and rejected last week. We believe pullbacks are buying opportunities but a move below... 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 69.17, up 0.16
Fundamentals: Yesterday’s large API crude draw of 6 mb was offset by a build in gasoline of 3.1 mb. Ultimately, expectations for a draw in inventories in the ballpark of 3-4 mb began to be priced in early in the week and clearly played as a bullish factor. Despite strong overall demand number from China’s Trade Balance last night, price action was unenthusiastic coming into this morning. Furthermore, there was a sweeping wave lower after news broke that China said in a statement on its website that in the best interests of national security they will raise Oil and Gas production and exploration. EIA data is due at 9:30 a.m. Central and expectations are for -3.33 mb crude, -1.7 mb Gasoline and +0.22 mb Distillates. We must watch Cushing closely and a draw of at least 1 mb there will be supportive. Additionally, the estimated production dipped in last week’s report, another dip will also be supportive.
Technicals: Price action failed again yesterday to get above major three-star resistance at 69.93. Call this a wave of profit taking with a surprise blow from fundamental headlines. Regardless, price has dipped below major three-star support at...
Yesterday’s close: Settled at 1218.3, up 0.6
Fundamentals: After the Chinese Yuan opened last night stronger, this has dissipated into the morning and it is now in the red against the U.S Dollar. In fact, the Dollar is broadly higher against currencies around the world weighing on Gold and other commodities. There is no major data from the U.S today and the potential bottoming pattern must now go through the unenthusiastic motions once again. While Gold did not make new lows yesterday, the Gold Miners ETF, GDX, did. It lost 1% and closed at the lowest level since December 2016.
Technicals: Gold is priming for a true test to major three-star support at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.