– The U.S. Dollar Index is breaking out, but still needs a weekly close (chart above).
– USDCNH (Dollar/Yuan) at a critical technical juncture (chart above). The 50-dma is priming to cross above the 200-dma. Potential resolution higher from consolidation wedge.
– VIX, bullish pattern playing out (chart above).
– S&P testing rare major four-star support and 50-dma, discussed below (chart above).
– Dollar strength is pressuring commodities.
– China left rates unchanged as expected, but easing was a wild card that may have underpinned commodities off yesterday’s lows.
– No major economic data on today’s calendar. Flash PMIs from Europe and U.S. Monday.
– Jackson Hole begins next Wednesday.
– Dallas Fed President Kaplan speaks at 10:00 am CT. Last week, he said, “if the economy unfolds the way he expects between now and the September meeting, the Fed should announce a taper in September and begin in October”. Although one of the most hawkish committee members, he does not vote until 2023.
– Keep an eye on the Unemployment Benefits narrative. Treasury said states can use pandemic benefits to keep them going. May added some wage inflation.
E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4401.50, up 7.00
NQ, yesterday’s close: Settled at 14,928, up 78.75
– Sharp rebound yesterday could not chew through major three-star resistance at 4411.75-4416.75. Highlighted this in our Midday Market Minute yesterday.
– Price action hugging 4400 with tremendous Option Open Interest here.
– Sellers took the reins for the second overnight in a row, but higher low and held rare major four-star support.
– Break below 4359.50-4365 and 50-day moving average could get ugly due to dealers selling to hedge.
– NQ major three-star resistance at 14,975-14,997 holding.
– NQ major three-star support at 14,692-14,722 aligns multiple indicators and 50-day moving average. Held yesterday but selling would pick up below.
Resistance: 4401.50-4403*, 4411.75-4416.75***, 4327.50***, 4445.50**
Support: 4373-4377**, 4359.50-4365****, 4350**, 4343.50**, 4315.50-4320.50***, 4302**, 4248.25-4252.75****
Resistance: 14,975-14,997***, 15,038-15,058**, 15,134-15,150***
Support: 14,850-14,874**, 14,763**, 14,692-14,722***, 14,500-14,540**
Crude Oil (October)
Yesterday’s close: Settled at 63.50, down 1.71
– Battling at rare major four-star support at 62.54-62.99.
– Close below opens the door for a test to $60.
– Major three-star resistance at 64.49 has held, reinviting selling
– Dollar weighing on commodities
– Fed tightening, slowing growth, China, Covid and demand outlook all weighing on Crude
– Baker Hughes due at noon CT.
Resistance: 64.49***, 65.01-65.21***, 65.51**, 66.34***, 67.00-67.23***
Support: 62.54-62.99****, 61.11-61.56**, 60.00-60.67****
Gold (December) / Silver (Sept)
Gold, yesterday’s close: Settled at 1783.1, down 1.3
Silver, yesterday’s close: Settled at 23.23, down 0.192
– U.S. Dollar strength and stable Treasuries keeping Gold rally attempts all week in check
– The same coupled with fears of slowing growth weighing on Silver.
– On the week, Gold +0.3%, Silver -2.7%
– Support at 1780-1782 in Gold doing heavy lifting
– Momentum indicator at 1785, continued action below here will encourage price action to chew through support
– Big level of support at 22.97-23.00 being defending in Silver.
Support: 1780-1782**, 1763.1-1768***, 1751.1***, 1736.8-1742.6**, 1718-1724.6***
Resistance: 23.41-23.50**, 23.78-23.82**, 24.07-24.32***, 24.51-24.65***
Support: 22.97-23.00***, 22.28****
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