E-mini S&P (September) / NQ (Sept)
S&P, yesterday’s close: Settled at 4520.50, down 4.75
NQ, yesterday’s close: Settled at 15,582.50, down 15.00
Fundamentals: We start this new month in accustomed fashion; stocks at record highs and the Federal Reserve easing at its peak pandemic pace. Last week, Fed Chair Powell bubble wrapped an impending taper announcement with an ultra-dovish view on rates and an overall path that hinges on jobs. He said, “the economy has made clear progress towards the bank’s goal of full employment”, adding there are strong prospects for continued gains. Jobs are front and center through the rest of the week. Today, ADP Payrolls are due at 7:15 am CT. Although there has been a clear deviation from this read and the official Nonfarm data, markets will certainly be paying attention. Expectations for today’s ADP is 613,000 jobs added in August and that for Friday’s official Nonfarm are 750,000.
Last night, a private read on Chinese Manufacturing PMI showed a contraction at 49.2. This comes a day after the public read avoided contraction at 50.1 but came in at the slowest pace since last February. Manufacturing PMI from the Eurozone continued to show a strong expansion at 61.4 but was a touch below the 61.5 expected and the slowest since this February.
From the U.S., the closely watched ISM Manufacturing PMI is due at 9:00 am CT and expected at 58.6, the slowest since November. The second look at the IHS Manufacturing PMI read is released just before at 8:45 am CT. We then look to the EIA’s Weekly Petroleum Status Report at 9:30 am CT amid OPEC+ developments via their official meeting. Atlanta Fed President Bostic, a 2021 voter who has become a bit more hawkish, speaks at 11:00 am CT.
Technicals: U.S. benchmarks are all pointing higher after a firm overnight session. Unlike yesterday morning, they have held gains through the European open and to the onset of U.S. hours. Some month-end gyrating yesterday held constructively against support in what never even felt like a 0.7% pullback in the S&P from its overnight high. Our momentum indicators in each the S&P and NQ remain stagnant and come in as our Pivots today at 4528.50 and 15,600. Each does face significant resistance overhead, relative to what significant resistance has meant these days. This is a level that each tested early yesterday at 4540.25-4543.50 in the S&P and 15,634 in the NQ aligning with the 15,677 high; closes above here will pave a path of continued higher prices. Yesterday’s wave of consolidation in the S&P did not cover Friday’s gap settlement and this brings a line in the sand at 4502.25-4505.50 that can knock price action of its perpetual daily record highs, at least through Thursday…
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Crude Oil (October)
Yesterday’s close: Settled at 68.50, down 0.71
Fundamentals: The OPEC+ meeting is underway, and all expectations point for the cartel to rollover their decision to bring back 400,000 bpd per month through next September. However, it became a sticky conversation to start the week after Kuwait expressed caution in keeping production increases in autopilot. On Tuesday, the OPEC+ JMMC did revise higher their demand forecast for 2022 from 4.2 mbpd to 3.28 mbpd. Furthermore, analysts believe Q4 demand will rise by 1.4 mbpd. The firmer demand forecast helps offset some fears of a surplus; expectations for a surplus of 2.5 mbpd in 2022 have been revised to only 1.6 mpbd. The meeting may conclude with not further developments, but traders must keep an ear to the ground.
Today’s EIA inventory report is due at 9:30 am CT. Analysts expect -3.088 mb of Crude, -1.633 mb Gasoline, and -0.65 mb Distillates. Last night’s private API survey showed -4.045 mb Crude, but +2.711 mb Gasoline in what was a fairly muted reaction as focus is squarely on today’s OPEC+ and official data.
Technicals: Price action has been stable, consolidating between first key support and first key resistance ahead of today’s OPEC+ decision and EIA report. Our momentum indicator comes in at 68.70, standing as our Pivot and Point of balance on the session. Ultimately, it is not only first support and resistance, but also major three-star support and resistance just behind those that matter most; we must see a close outside of … 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 (December)
Gold, yesterday’s close: Settled at 1818.1, up 5.9
Silver, yesterday’s close: Settled at 24.006, unchanged
Fundamentals: Gold and Silver are getting a boost this morning after the private ADP Payroll Survey for August came in at 374,000 versus 613,000 expected. ADP and the official Nonfarm Payroll read have deviated drastically in recent months. Although it must be taken with a grain of salt, it is certainly bringing a tailwind to the precious metal complex this morning. Next, we look to data on Manufacturing. First, the final look at IHS Manufacutring PMI is due at 8:45 am CT. Next, the more closely watched ISM Manufacturing is released at 9:00 am CT. From there, we look to Atlanta Fed President Bostic, a 2021 voter, at 11:00 am CT.
Technicals: Gold and Silver finished last week on strong footing but have not been able to extend those gains just yet. Ultimately, it appears market participants are waiting on Friday’s Nonfarm Payroll report on the heels of Fed Chair Powell’s comments last week. However, each Gold and Silver are building bull-flag like patterns from last Friday’s spike. This does signal a path higher, but we cannot ignore the 200-day moving average in Gold which has been a significant barrier since breaking below it in June. While they consolidate, we will look to our momentum indicators 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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