E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4474, up 11.50
NQ, yesterday’s close: Settled at 15,134, up 8.25
Fundamentals: By the end of a wild session yesterday, the S&P and Dow had achieved and settled at fresh record highs for the fifth straight session. Price action softened through Sunday night on the heels of Friday’s Michigan Consumer Sentiment whiff, Sunday’s weak China data, and Monday’s miss on NY Empire State Manufacturing. Within an hour of the opening bell, the selling had been digested, allowing the S&P, Dow and NQ to turn sharply higher. Despite a powerful finish, there was little follow through overnight and all four major U.S. benchmarks are lower at the onset of U.S. hours with the Russell 2000 leading.
Retail Sales, Fed Chair Powell, and earnings from the largest retailers highlight today.
Retail Sales for July missed expectations, but MoM had tougher base comparisons given strong revisions for June. Also, July’s YoY read was +15.8%. This is massive growth given that last July’s YoY was +2.7% mid-pandemic. Similarly, June was +18.7% YoY 2021 and +1.1% YoY 2020. The consumer is strong, and the market’s initial reaction is positive despite the headline miss; stocks, Dollar, and yields all ticked up. Next up is Industrial Production at 8:15 am CT.
From there, all eyes will be on Fed Chair Powell’s town hall at 12:30 pm CT. Will he lay groundwork for a policy shift by September, or an announcement as early as Jackson Hole next week? We have seen committee members turn a bit more hawkish on the heels of July’s strong job growth, however, Powell has been quiet since the July Fed meeting and fresh comments will be watched extremely close.
Both Walmart and Home Depot beat top and bottom line expectations, but their reactions were mixed. Home Depot is down more than 3% after missing same-store sales estimates. Also, the company still has not provided full year guidance. Walmart is unchanged ahead of the bell, but the company posted strong earnings across the board and bellwether growth from its grocery business.
Technicals: Price action is lower ahead of the bell despite yesterday’s strong close. The higher settlements now leave strong overhead resistance at 4468.75-4474 for the S&P and 15,134-15,150 for the NQ. There has certainly been an uptick in volatility, but neither index has broken important levels of support. In fact, yesterday’s early selling slowed in front of such. This is now major three-star support in the S&P at 4425-4430 and has been major three-star support in the NQ at … Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
Crude Oil (September)
Yesterday’s close: Settled at 67.29, down 1.15
Fundamentals: Crude Oil rebounded from early lows yesterday after OPEC+ said it will not meet the White House’s call for them to bring back additional production. Weak Chinese data Sunday night has been weighing on the tape, but the market began pricing in slower China since early July. Bill Baruch spoke with BNN Bloomberg yesterday morning to discuss Crude Oil and the developing narratives. Today’s Retail Sales data missed expectations but was overall solid. Industrial Production data crushed expectations. We still have Fed Chair Powell at 12:30 CT, but the solid data and early EIA estimates of -1.259 mb Crude and -1.8 m b Gasoline might be enough to underpin price action through the first half of the day.
Technicals: Price action is trying to form a higher low, but certainly working through waves of selling. Our momentum indicator comes in at 67.20 this morning and will act as a point of balance. Despite the sharp move lower through support yesterday morning, we still view major three-star support at … Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
Gold (December) / Silver (Sept)
Gold, yesterday’s close: Settled at 1789.8, up 11.6
Silver, yesterday’s close: Settled at 23.791, up 0.012
Fundamentals: Gold and Silver are both higher this morning but have ticked off their overnight levels. Despite the headline miss, the U.S. Dollar and rates liked the Retail Sales data (we discuss in more detail in the S&P/NQ section). Very strong Industrial Production gave an added tailwind to that narrative. Gold has had a steady rebound since last Sunday night’s selloff and has nearly retested the psychological $1800 mark. This leads into Fed Chair Powell’s town hall today at 12:30 CT. We have seen committee members turn a bit more hawkish on the heels of July’s strong job growth, however, Powell has been quiet since the July Fed meeting and fresh comments will be watched extremely close. Added strength in both the Dollar and rates will weigh on Gold and Silver from these levels.
Technicals: Gold traded into strong resistance this morning at 1796-1799. This aligns multiple technical levels as well as the underside of what was trend line support from the March low that was broken after Nonfarm Payroll on August 6th. Our momentum indicator comes in at 1789.4 and is underpinning the early action. We then look to first key support at 1785. As for Silver, it stuck its neck above first key resistance at 23.78-23.82 and failed in front of major three-star resistance at … Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.
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