|E-mini S&P (September) / NQ (Sept)|
S&P, yesterday’s close: Settled at 4521.25, up 0.75
NQ, yesterday’s close: Settled at 15,609.25, up 26.75
Fundamentals: U.S. benchmarks are again pointing higher after strength overnight. However, this week, price action has struggled to hold highs through the entirety of the U.S. session as it digests a vicious rally over the last two weeks. As we noted here yesterday, jobs are front and center. ADP Payrolls came in well below expectations at 374,000 versus 613,000, but it is important to note the ongoing differences between the private survey and the official Nonfarm Payroll report due this Friday. Over the last three months, CNBC noted an average difference of 337,000 jobs between the two. This morning, Challenger Job Cuts came in at 15,723, near the record low of set in 1997 of 15,100; this signals hiring is sticky. Weekly Jobless Claims came in at a new pandemic low of 340,000, below expectations of 345,000. Unit Labor Costs were higher than expected and Nonfarm Productivity was lower than expected, this exudes a tightening situation. Expectations for tomorrow’s Nonfarm Payroll report are for 750,000 jobs created in August.
Elsewhere on the economic calendar, we look to Factory Orders for July at 9:00 am CT. Two 2021 Fed voters speak this afternoon. First, Atlanta Fed President Bostic speaks at noon CT. Yesterday, the evolving hawk pointed to worries on evictions slowing the economy. San Francisco Fed President Daly is seen as a moderate, she speaks at 2:00 pm CT.
In Europe, PPI came in hotter than expected at 12.1% YoY and 2.3% MoM for July. Also, China and a U.S. climate envoy are meeting, and traders should keep an ear to the ground on those developments.
Technicals: Price action across U.S. benchmarks remains extremely buoyant, with any wave of consolidation quickly being bought. However, only the Russell 2000 has extended gains significantly past Monday’s opening bell rally. Major three-star resistance in the S&P at 4540.25-4543.50 has kept a lid on these overnight rallies. First key support in the S&P has slowed waves of selling and aligns yesterday’s intraday low with settlements over the last two sessions at 4519.25-4521.25. Similarly, yesterday’s settlement in the NQ aligns with the overnight low and yesterday’s Pivot as first key support at 15,600-15,609. As we have noted this week, major three-star support in the S&P at 4502.25-4505.50 brings a significant area of support aligning with last Friday’s gap settlement; a break below here would encourage added selling.
Resistance: 4540.25-4543.50***, 4575.50**
Support: 4519.25-4521.25**, 4510.50-4512.50**, 4502.25-4505.50***, 4488.50-4492.25***, 4471-4473.75**, 4462.50-4466.50***, 4454.25-4455.25**, 4434-4437***
Resistance: 15,634-15,677***, 15,905**, 16,000-16,046***
Support: 15,600-15,609**, 15,566*, 15,517**, 15,426-15,455***, 15,364-15,397*, 15,274-15,308***, 15,150-15,194***
Crude Oil (October)
Yesterday’s close: Settled at 68.59, up 0.09
Fundamentals: It was a massive headline draw in Crude Oil of -7.169 mb on yesterday’s EIA report that buoyed early weakness and helped finish off a steady session. This quietly turned into strength overnight and price action is approaching gains of 1% ahead of the U.S. opening bell. Although Gasoline did build, this was offset by a draw in Distillates and Net Imports that only drop 45,000 bpd. In fact, the build in Gasoline was justified by a larger drop than expected in Refinery Utilization. OPEC+ kept their plan in place to add 400,000 bpd in production, but at the end of the day, it was a better demand outlook through 2022 coupled with U.S. Dollar weakness that also underpinned prices.
Technicals: Weakness early yesterday did not settle below major three-star support at 67.42-67.77, something that we noted as necessary to encourage a breakout of this range consolidation. Although price action did trade to a low of 67.12, the EIA report helped turn the tides and momentum carried. The rally is now testing the upper bands, first key resistance comes in at 69.02-69.39, an area that Crude has struggled since the Sunday night spike. Above there is major three-star resistance aligning with the Sunday night spike at 69.64-69.79; price action will now give it a go on a range breakout north, a close above here will encourage added buying into the weekend.
Resistance: 69.02-69.39**, 69.64-69.79***
Support: 68.45-68.59**, 68.19-68.25**, 67.42-67.77***, 66.62-66.92**, 66.00**, 65.64-65.69***
Gold (December) / Silver (Sept)
Gold, yesterday’s close: Settled at 1816, down 2.1
Silver, yesterday’s close: Settled at 24.221, up 0.215
Fundamentals: Gold and Silver have been consolidating at and above the highs from last Friday’s spike as they away tomorrow’s Nonfarm Payroll data. Yesterday’s poor read on ADP helped power a test to the upper end of their ranges, but each struggled to follow through. The U.S. Dollar remains overall weak coming off its failed breakout and this has underpinned recent strength across the precious metals space, but at the end of the day it is all about jobs tomorrow. Today’s Weekly Jobless Claims came in at a new pandemic low of 340,000, below expectations of 345,000. Also, Unit Labor Costs were higher than expected and Nonfarm Productivity was lower than expected, this exudes a tightening situation. Although the better data may provide a headwind, strength in Treasuries today and ongoing U.S. Dollar weakness has worked to offset this so far on the session.
Technicals: Price action in each Gold and Silver is chopping around. Silver attempted to breakout of a bull-flag like pattern yesterday but failed at major three-star resistance aligning with the August 6th settlement. As for Gold there is clear headwind aligning with the 200-day moving average. Still, each has been underpinned by major three-star support below at 1808.9 for Gold and 23.80-23.88 for Silver. However, a weekly close below here would likely encourage added selling.
Resistance: 1822.5**, 1835-1840***
Support: 1808.9***, 1798-1801.5**, 1791.4**, 1780-1784***
Resistance: 24.24-24.38***, 24.68-24.85***, 25.64***
Support: 23.80-23.88***, 23.30-23.42***
You can sign up for a free trial here: https://www.bluelinefutures.com/free-trial