E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4231.50, down 4.75
NQ, yesterday’s close: Settled at 14,263, up 4.75
Fundamentals: U.S. benchmarks are pointing higher ahead of the bell. Whereas the S&P is nearing a fresh record, the NQ has now set one for the third straight session. So far, we have seen nothing to discourage our outright Bullish Bias. Yesterday was a quiet session as price action digested the strong rebound from last week’s lows. Progress on infrastructure talks in Washington hit the tape after the close and has underpinned recent strength. The first half of the week can be characterized by Fed speak, but infrastructure is now grabbing headlines and so will the economic data. Flash PMIs were overall strong yesterday but mixed versus expectations with Manufacturing beating and Services falling shy. Today, the final look at Q1 GDP was in line with expectations at 6.4%, but weekly Jobless Claims came in higher than expected at 411,000. After two straight weeks below 400,000 for the first time since the onset of the pandemic, the last two have been back above. Also, Durable Goods were softer than expected. This leads into comments from NY Fed President Williams at 10:00 am CT, a 7-year Note auction at noon CT, and the Fed’s Bank Stress Test results at 3:30 pm CT. Tomorrow brings Core PCE, the Fed’s preferred inflation indicator.
Technicals: Yesterday, the S&P and NQ did not close above their next levels of strong resistance, but a firm tape overnight has taken each decisively out above those marks at 4236.50-4241 for the S&P and 14,230-14,286 for the NQ. Upon Tuesday’s close, the S&P cleared rare major four-star resistance at 4208-4213 and this has fueled added strength, but price action now faces major three-star resistance aligning with the record 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 (August)
Yesterday’s close: Settled at 73.08, up 0.23
Fundamentals: Crude Oil is pulling back this morning, but the rally remains very healthy. Yesterday’s EIA inventory report was bullish but may have flushed all the bullishness out of the market in the near-term, forcing price action to digest recent gains. EIA confirmed a large draw of 7.614 mb of Crude and surprised with a draw of 2.93 mb of Gasoline. Refinery Utilization was down, Imports were up, and Exports were down. This tells us Crude and Gas were in high demand, confirming a bullish report. So why no follow through? Of course, the digesting of recent gains is important, but quietly the Saudi Oil Minister commented on inflation, saying OPEC+ has the responsibility of “taming and containing inflation”. This alludes to OPEC+ mapping out a plan to bring production back at their meeting next week.
Technicals: Price action cleared major three-star resistance yesterday with a high of 74.25 but failed to settle above the mark at 72.70-73.25. The tape has now decisively dipped below our momentum indicator that happens to come in 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 (August) / Silver (July)
Gold, yesterday’s close: Settled at 1783.4, up 6.0
Silver, yesterday’s close: Settled at 26.11, down 0.254
Fundamentals: Gold and Silver had a terrific start to yesterday’s session but just as the rebound began to fizzle out, comments from Atlanta Fed President Bostic encouraged selling. Bostic is a voter this year, and although he does not vote again until 2024, he is seen as working up the ranks of the bank and therefore his voice carries weight. He stated that he expects interest rates to lift off in late 2022 and two more hikes to follow through 2023. He did note the committee should wait on the economic data for the next 3-4 months before deciding when to taper asset purchases. Overall, it was the positioning of his comments and how they came ahead of Boston Fed President Rosengren later that afternoon. Given the technical stall, this likely encouraged such liquidation across the metals as Rosengren is seen as a hawk. However, his comments did not stand out as being too one-sided. Some Rosengren relief coupled with progress on infrastructure spending has likely worked to buoy a very weak close yesterday. Today’s economic data has also underpinned the early morning strength; GDP inline, but Jobless Claims and Durable Goods each missed. The U.S. Dollar is trading at the lower end of its range this week. NY Fed President Williams speaks at 10:00 am CT, there is a 7-year Note auction at noon CT, and the Fed’s Bank Stress Test results are due 3:30 pm CT. Tomorrow brings Core PCE, the Fed’s preferred inflation indicator; this will have a great impact on the precious metals space.
Technicals: Yesterday’s fizzle out was certainly a disappointment technically; it left a big daily tail on each Gold and Silver from their highs on the session. Our concern here would be a bear pennant building. We still hold a strong belief that Gold and Silver will be higher in the coming 30-60 days but suggest preparing for added weakness in the very near-term. However, in the case of such weakness, we believe it would be one final light flush that creates a terrific buying opportunity. Still, the tape remains firm and has neutralized yesterday’s late selling. Our momentum indicator in Gold comes in 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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