Market Overview – Morning Express
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4505.00, up 52.75
NQ, yesterday’s close: Settled at 14,654.00, up 283.50
Fundamentals: U.S. equity benchmarks were bid into close yesterday, pinging the exact major three-star resistance we highlighted in the Midday Market Minute. Price action is digesting the recent run and comments from Fed Chair Powell hit the tape at 7:00 am CT, but his focus seems to be digital currencies. Housing data is also a highlight this morning. As yields rise, Mortgage Applications fell by 8.1% WoW and New Home Sales are due at 9:00 am CT. The Russia-Ukraine war may not have the same market moving impact day-to-day as it did a couple of weeks ago, but investors and traders alike are keeping a close pulse on the ever-developing conflict. A wave of selling hit this morning on news that Poland is considering expelling 45 Russian diplomats and summoned the Russian ambassador to their Foreign Ministry. Russia then said, it will “respond” if Poland expels Russian diplomats. Escalation in some manner remains the headline market risk on the war front, and there are also signs that Belarus could become more involved. However, the global bond sell-off may not be discounted by U.S. equity benchmarks after this week-long rebound and we see this as a great risk in the near-term, due to the velocity in which yields have risen. The yield on the U.S. 10-year hit a new high of 2.417% this morning with the 2-year testing but remaining contained below yesterday’s 2.20%. On March 1st, the 2-year yield was 1.263%, it has surged by nearly a whole percentage point or by 74% in three weeks.
Bill Baruch joined the TD Ameritrade Network yesterday morning.
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Technicals: Like Friday, price action surged on the open yesterday and never looked back. This has left some areas of strong support aligning with the previous day’s settlements. Similarly, after settling near the high yesterday, there are overhead gaps left behind. To both the downside and upside, these account for unfinished business. For the S&P, this creates major three-star support at our recurring 447.25-4453.25. Although yesterday was very strong, price action was more sideways after the opening spike, and this has allowed our momentum indicators to catch the tape. These align to create our Pivots, and this signals some near-term exhaustion while below … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (May)
Yesterday’s close: Settled at 109.27, down 0.70
Fundamentals: Crude Oil is off to another strong start, after consolidating and digesting Monday’s gains yesterday. Russia is proactively trying to deflect the EU from adding sanctions on energy. Russia’s Energy Minister Novak warned of an Oil and Gas collapse if sanctions were placed on energy. Adding fuel to the fire on rising prices, so to speak, Kazakhstan’s CPC pipeline has fully suspended flows due to supposed storm damage. The pipeline accounts for 1.2% or 1.2 mbpd of the world’s Oil and is estimated to be out of commission for six weeks. Buyers have strayed from this pipeline due to mixtures with Russian grades in order to avoid those exports. Price action also seemed to garner a bid after Russian President Putin said he plans to switch to Russian Rubles when selling gas to non-friendly countries, adding the freezing of Russian assets destroyed trust.
U.S. inventories are also adding a tailwind after a surprise draw of 4.28 mb from the private API survey last night. Expectations for today’s official EIA report are +0.114 mb Crude, -1.986 mb Gasoline, and -1.386 mb Distillates.
Technicals: Price action has displayed a beautiful series of higher lows since yesterday’s low of 107.10 at 4:00 am CT. As vicious the swings have been, the technicals remain extremely accurate. Yesterday’s settlement was right at our Pivot after holding support and today’s session low aligned perfectly at first key support at 108.35. Price action is making another run at what was rare major four-star resistance upon yesterday’s first test, but the constructiveness of yesterday’s consolidation with higher lows signals that we are likely to pierce to new swing highs on this rebound. We are eyeing as high as … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled at 1921.5, down 8.0
Silver, yesterday’s close: Settled at 24.904, up 0.409
Fundamentals: Gold and Silver are on the mend and keying off geopolitics. A firmer Treasury landscape after the recent bloodbath is also helping. Poland and Belarus are grabbing headlines regarding diplomats, President Biden said Russia’s use of chemical weapons are a real threat, and NATO fears that China could provide material support to Russia. These signals we could be on the verge of escalation and Gold has held the constructive path we asked of it over this last week. Traders also want to keep an ear to the ground on Fed speak. Fed Chair Powell spoke this morning but did not seem to make any headlines on monetary policy. Housing data is also on the schedule; Mortgage Applications fell by 8.1% WoW and New Home Sales are due at 9:00 am CT.
Technicals: Gold pinged key support at 1909.5 early yesterday and responded. Silver did form the outside bearish day but quickly responded to major three-star support at 24.71-24.75. The firm tape has both out above our momentum indicators that align as first key supports below. Still, early strength has struggled against strong resistance in Gold at … Click here to get our (FULL) daily reports emailed to you!