|E-mini S&P (September) / NQ (Sept)|
S&P, yesterday’s close: Settled at 4535.25, up 14.00
NQ, yesterday’s close: Settled at 15,601, down 8.25
Fundamentals: Nonfarm Payroll is due at 7:30 am CT. The report will be watched extremely close, for it could signal the Federal Reserve’s next move come September 22nd. It is expected that 750,000 jobs were gained in August and the Unemployment Rate dropped to 5.2%. The economy’s reopening has been slowed by the Delta Variant as state and local governments bring back restrictions. One month ago, July’s data surpassed expectations and June’s read was revised higher, marking job growth at 943,000 and 938,000 respectively. This certainly signaled the economy is well on its path to recovery and does not need the Federal Reserve’s full set of pandemic quantitative easing. Still, the central bank and its head have maintained an extremely patient hand due to the ongoing pandemic and of course politics. One week ago, Fed Chair Powell said, “the economy has made clear progress towards the bank’s goal of full employment”, adding there are strong prospects for continued job gains and his belief inflation will not hold its current trajectory. Today’s data will be dissected every which way; a beat will certainly pressure the Fed less than three weeks from now, whereas a Goldilocks number keeps the party going and a drastic miss would raise many questions.
Although jobs are front and center, it is not the only key data point this morning. ISM Non-Manufacturing for August is due at 9:00 am CT. The services sector read set a record in July, but expectations are tempered from last months 67.0 to 62.8. Earlier, due to the Delta Variant, Services PMI from China showed contraction and final reads from August for Europe were revised lower.
Technicals: There is no sign this bull run is slowing, but we have maintained an extremely cautious tone of late. This is partly due to waves of weakness that rebound so quickly, within 24 hours they are already at our next level of crucial resistance, from there a grind is on. This week, the S&P has traded higher overnight in every session but has failed to extend those gains. When we write this, we consider near, intermediate, and long-term perspectives. From a near-term view, when the market is higher overnight and already at major three-star resistance our Bias is to hold Neutral. From an intermediate to long-term perspective, there is certainly upside to what we have called our rolling 12-month target of …
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Crude Oil (October)
Yesterday’s close: Settled at 69.99, up 1.40
Fundamentals: A stew of positive news flow boosted Crude Oil back above the psychological $70 mark yesterday. First, OPEC+ held ground on production despite being pulled from either direction, but it was their upward revisions on 2022 demand. The EIA inventory report showed a surprise headline draw despite a lower-than-expected call from Crude from refiners. At the end of the day, it is the ongoing outages in the Gulf that will take longer than expected that are truly underpinning this strength. Furthermore, continued weakness in the U.S. Dollar and a buoyant risk landscape have also played a role.
Technicals: Price action is holding steadily at and above previous resistance aligning with the Sunday night spike high. This will stand as our Pivot at 69.64-69.79 and a weekly close above here should pave a path into major three-star 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.
Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1811.5, down 4.5
Silver, yestesrday’s close: Settled at 23.918, down 0.303
Fundamentals: Riding high from Fed Chair Powell one week ago, Gold and Silver were unable to extend gains ahead of today’s Nonfarm Payroll report. Expectations are for 750,000 jobs to have been gained in August and market participants will look for any signal of the Fed’s next move on September 22nd (read more in our S&P/NQ section). A strong report today will hamper Gold and Silver’s recent strength and certainly set up a wave lower. However, a jobs miss will further weaken a vulnerable U.S. Dollar and boost the precious metals in what would play out as a strong technical landscape.
Technicals: Price action has been waffling around our momentum indicator and Pivot all week awaiting today’s fundamental news. There is clear resistance overhead, but upon a weak jobs report the bull-flag like patterns in each Gold and Silver will get the needed boost fundamentally to achieve such a break above. Whereas strong major three-star support 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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