E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4350.50, up 35.00
NQ, yesterday’s close: Settled at 14,827.75, up 105
Fundamentals: After a two-day rebound, the S&P is less than 1% from its record high. The back half of the week is busier from an economic data standpoint and today’s ECB meeting is front and center. The bank left rates unchanged as expected and emphasized its commitment to maintaining accommodative policy in order to reach its inflation objective. On that objective, they reiterated the new symmetric inflation goal of 2%. Additionally, the bank noted it anticipates higher PEPP purchases in the third quarter. ECB President Lagarde will speak at 7:30 am CT. Traders must keep an eye on rates and currencies.
Weekly Jobless Claims, both Initial and Continuing, came in much higher than expected. Existing Homes are due at 9:00 am CT, KC Fed Manufacturing at 10:00 am CT, and a 10-year TIPS auction at noon CT.
On the earnings front, Texas Instruments reported after the bell yesterday and is down about 5%. The company highlighted the ongoing chip shortage, a week after soothing comments from Taiwan Semiconductor, reminding investors of potential hurdles in the second half of the year. Still, NVIDIA is up more than 1% ahead of the bell. Amid a very busy morning of reports, others to note are D.R. Horton -4%, Union Pacific +2.25%, and Crocs +9%, Southwest -2%, American Airlines -1.5%, Freeport-McMoRan -1%, AT&T +1.4%. (Disclosure: Blue Line Capital owns NVDA, LUV, FCX)
Technicals: Our rolling objective in the S&P remains 4620 but we are broadly cautious amid this two-day rebound. Buy programs showed up again on the open yesterday and the S&P ripped through two critical levels of resistance. Given the quick stair-stepping climb higher, shelfs of strong support have been created in each the S&P and NQ. For the S&P, there was a trend line from the highs it snuck out above yesterday. This trend now brings major three-star support at 4335, while added support is just below at 4326-4328. We view the bulls as having regained the driver’s seat while holding out above …
|Crude Oil (September)|
Yesterday’s close: Settled at 70.30, up 3.10
Fundamentals: Crude Oil roared higher yesterday despite lackluster headline inventory data. It was a broad risk-on session, and everything rallied sharply, but make no mistake, equity markets have been taking a queue from Crude Oil. Bill Baruch pointed to the inventory data in yesterday’s Midday Market Minute and how the headline read of +2.108 mb Crude and less of a draw in Gasoline was really the byproduct of a surge in Net Imports of nearly 2.5 mbpd. Furthermore, Refinery Utilization fell of sharply. This points to added Crude stocks and would highlight lackluster Gasoline demand if it were not for the massive imports. All things considered, there was steady demand exuded by the report and the result was a sharp snap back from an exacerbated selloff due to the one-two punch of Delta and OPEC+ to start the week. With all of that said, if you captured the rebound, consider locking in some gains. Weak Jobless Claims data this morning will work to overshadow exuberance at these levels.
Technicals: Price action is running into a thick area of resistance aligning several technical indicators, and the not of least a gap from Friday’s settlement at 71.56 (highlighted on the chart). Crude Oil must close out above 71.56-71.85 and turn positive on the week in order to fully neutralize Monday’s bloodbath and the damage it left behind. Price action broke below an uptrend line on Monday which also now bring resistance at 71.00-71.15 (also highlighted in the chart) Steady action above our Pivot at 70.30-70.54 is supportive and a break below our momentum indicator at the psychological $70 mark is negative.
Resistance: 71.00-71.15**, 71.56-71.85***, 72.64***
Support: 70.00**, 69.02-69.23**, 67.05-67.20***
Gold (August) / Silver (Sept
)Gold, yesterday’s close: Settled at 1803.4, down 8.0
Silver, yesterday’s close: Settled at 25.255, up 0.26
Fundamentals: Gold and Silver are trading off their overnight lows. Gold is finding better traction from a new swing low on the week at 1791 and trading back above 1800, being underpinned by U.S. Dollar weakness after weak Jobless Claims data and the ECB meeting. Treasuries are also seeing support on the heels of both from their overnight lows. Rates and currencies are going to be a critical component to the path of precious metals in the near-term as we move through ECB President Lagarde’s speech this morning and Flash PMIs tomorrow. We do maintain the belief the yield of the 10-year Note has reached a low and will work itself higher over the next 30 days. Furthermore, such initial strength in yields or weakness in Treasuries will be a steadfast headwind to Gold, but ultimately present a tremendous buy opportunity.
Bill Baruch joined Kitco’s David Lin yesterday for a deep dive into the macro backdrop and his outlook. Does the think Gold will finish the year above or below $1800?
Technicals: Gold is regained 1800 and battling at our momentum indicator at 1801; a failure to decisively hold above here will signal exhaustion. Traders should also closely watch the same indicator for Silver at 25.23. As noted above and yesterday, we believe the value in Gold will be found from lower and we will look to use weakness into major three-star support at 1775-1777 and 1768 as a buy opportunity.
Resistance: 1815**, 1828-1835***, 1854.6-1856.4***
Pivot: 1801Support: 1793-1796**, 1783.3-1785.9**, 1775-1777***, 1768***
Resistance: 25.74-25.80***, 26.44-26.580***
Support: 24.99-25.04**, 24.80**, 23.82**, 23.20***
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