E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4280.50, up 9.25
NQ, yesterday’s close: Settled at 14,512.50, up 173.50
Fundamentals: The Delta Variant gabbed headlines yesterday and markets reacted. Tech stocks led the way as traders and managers pulled out their 2020 Covid playbooks. The NQ gained 1.2% and dragged the S&P along for a 0.2% gain on the session. Energy -3.33%, Financials -0.81%, and Industrials -0.52% were the worst performers and this sent the Dow down 0.49%. Treasuries were bid yesterday too, but this has seemed to dissipate for now, signaling Delta is less of a concern. Also, the Dow’s small positive this morning ahead of the bell is leading U.S. benchmarks and we expect that snapback to continue. As we said in yesterday’s daily Midday Market Minute, the data this week will matter. Things start to pick up today. Case Shiller was mixed, but overall better. Next up is the closely watched CB Consumer Confidence for June at 9:00 am CT. Tonight, we look to Chinese PMI data due at 8:00 pm CT.
Technicals:The NQ led the way yesterday and surged on the opening bell, but the S&P was unenthusiastic. Still, price action in the S&P held major three-star support aligning with its previous record high and this set the stage for a strong finish, a fresh record close. Our momentum indicators are rising. For the S&P this comes in at 4276.50. The three levels we are watching for construction at and above are 4280.50, yesterday’s close, 4276.50, our rising momentum indicator, and 4271.25, last week’s close; the S&P is extremely bullish while trading constructively at and out above each of these. For the NQ, our rising momentum indicator aligns with previous 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.
Crude Oil (August)
Yesterday’s close: Settled at 72.91, down 1.14
Fundamentals: Crude Oil is snapping back this morning, trading within 1% of last week’s new swing high. The Delta Variant headlines certainly weighed on the tape yesterday, but we could be seeing the start of a two-sided impact. OPEC+ has begun their Joint Technical Committee meeting which comes ahead of their full July 1st meeting. The JTC will consider the demand landscape given the Delta news as well as outlook for 2022. OPEC Secretary General Barkindo noted significant uncertainties are a need for caution. The Energy complex reacted favorably as it interpreted his comments to mean OPEC+ will continue to be patient in bringing supply back, not only considering the underlying price and the fact OECD stocks are now below the 2015-2019 average. U.S. inventory data will also come into the picture as the day unfolds.
Technicals: Yesterday, Crude Oil did not break below major three-star support at 72.57-72.75, but this level did get whacked briefly overnight to a low of 71.97. Crude did bounce back quickly, and we continue to find this technically significant; a close below here will open the door to … 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) / July (September)
Gold, yesterday’s close: Settled at 1780.7, up 2.9
Silver, yesterday’s close: Settled at 26.254, up 0.128
Fundamentals: Gold and Silver have had one heck of a wild morning. The first flush attempt was rejected, and each bounced back firmly, but the second attempt broke ground, and each has hit the lowest level since mid-April. Consumer Confidence data this morning has not helped the situation as a blowout read reinvigorated early U.S. Dollar strength. This morning’s price action sets the stage into month-end, the Basel III reclassification and Friday’s jobs data. The economy has strengthened, and the Fed has taken a less dovish, or hawkish, turn. This has certainly repriced Gold. However, there is a very interested narrative behind Base III which reclassifies Gold as a Tier 1 asset, meaning it is as good as cash on a bank’s balance sheet. We have discussed this before, and another component being the removal of hypothecated Gold being counted on their balance sheet. Overall, we find this to be a very positive narrative behind Gold. These volatile times are not going away anytime soon, but after trading Gold for 20 years, one thing we do know is that volatility tends to pick up before historic moves, in turn, making it very difficult for weak hands to see moves through fruition.
Technicals: The bulls certainly have their work cut out for them. For Gold, our next big level is 1756.8 and price action is testing into there now. A close above here will help stave off added selling, but a failure to do so does open the door to … 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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