Blue Line – Morning Express September 28th, 2021

Blue Line Morning Express |
– Rising rates weighing on Tech sector, NQ -1.5%
– Rates rise on global central bank hawkishness, reopening post-Delta, reflation of the reflation trade, supply disruptions and energy crunch.
– Energy crunch stokes inflation; Crude Oil +3% on week and nearing high of year 76.98, Natural Gas +10% today and 22% on the week.
– U.S. Dollar rises on inflation, rates, ahead of Powell, and safe-haven. DX highest since August 20th.
– Fed speak continues. Congressional testimony from Fed Chair Powell front and center. He is expected to ‘float the balloon’ inflation may not be as transitory as first thought.
– Deadlock in Congress creating fear, face government shutdown Friday. Likely aiding the Treasury snowball.
– St. Louis Fed President Bullard said inflation likely to run at 2.8% through next year. “Large shock needed to throw off start of bond taper”. Expects two rate hikes in 2022. Showing some signs of concern in speech. He is a 2022 voter.
– Chicago Fed President Evans at 8:00 am CT, Fed Governor Bowman at 12:40 pm CT, Atlanta Fed President Bostic 2:00 pm CT. Evans and Bostic vote in 2021, only Bowman votes in 2022.
– Case Shiller Home Price Index at 8:00 am CT, Consumer Confidence at 9:00 am CT, Treasury auctions $62 billion of dreaded 7-years.
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at Settled at 4433, down 12.75
NQ, yesterday’s close: Settled at Settled at 15,194, down 124.00
– Price action down sharply in overnight. S&P and NQ both failed at big major three-star resistance levels at 4474.50-4477.25 and 15,326-15,360
– S&P testing through big levels of technical support, now facing 4282.75-4484 and 4371.75. Break below here opens door to 4337-4343.25.
– NQ Pivot is previous support at 15,009-15,033, must close above here or faces continued selling.
– S&P 100-dma at 4325, NQ 100-dma at 14,600
Bias: Neutral
Crude Oil (November)
Yesterday’s close: Settled at 75.45, up 1.47
– Crunch continues and Energy extends
– Brent hits high of 80.74 and took out front month high of year at 77.83 yesterday
– WTI high of 76.67, front month high of year at 76.98
– U.S. Crude stocks at 3-year lows and expectations for -2.33 mb on this week’s report
– Rising momentum indicator at 75.70
– Friday’s settlement aligns to create rare major four-star support at 73.58-73.98
Bias: Bullish/Neutral
Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1751.4, down 40.7
Silver, yesterday’s close: Settled at 22.679, down 0.228
– Different day, same story – U.S. Dollar and rate strength weighing directly on precious metals.
– Continue to hold a negative near-term outlook, but a flush should bring a nice buy through Q1 2022.
– Gold testing into next shelf of major three-star support at 1731.7-1737.4, no early bounce wearing on bulls.
– Similarly, Silver testing into 22.02-22.35 major three-star support
Bias: Neutral/Bearish
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