Market Overview – Morning Express
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4447.50, down 57.50
NQ, yesterday’s close: Settled at 14,447.00, down 207.00
Fundamentals: U.S. equity benchmarks digested the week-long run yesterday and are pointing higher ahead of the opening bell. Overseas markets were mixed with the Nikkei gaining ground while the DAX and Hang Seng slipped, all negligible amounts given recent volatility. President Biden is in Brussels to meet with NATO and EU leaders to form a plan to pressure Russia, which may include energy sanctions. Early headlines point to NATO increasing its presence on the east and preparing for a nuclear or chemical incident by Russia. While the world is dealing with Putin, North Korean dictator Kim Jong-un reminded everyone he is still there by testing an intercontinental ballistic missile (ICBM), its biggest test since 2017. We now brace for headlines from the summits in Europe.
Today’s economic calendar picks up, led by flash PMIs for March. The Eurozone topped expectations, whereas the U.K. was mixed with better Services, but a miss on Manufacturing. From the U.S., Initial Jobless Claims set a new post-pandemic low with 187,000, versus 212,000 expected and 188,000 for the week of December 9th. However, Durable Goods whiffed, falling by 2.2% when -0.5% was expected. Flash PMIs are up next at 8:45 am CT.
After a reprieve yesterday, the U.S. 10-year yield is retesting 2.40%. Trend line resistance from 2007 comes in at 2.60% and 121-20. This pins Fed committee members front and center. The hawkish Fed Governor Waller is set to speak at 8:15 am CT. Next, Chicago Fed President Evans speaks at 8:50 am CT and Atlanta Fed President Bostic follows at 10:00 am CT, neither are 2022 voters. Keep an ear out for off-schedule hits.
Technicals: The S&P closed on session lows yesterday, right at major three-star support at 4447.25-4453.25. The selling abated overnight, and the tape is again firm. There are key levels of resistance overhead, highlighted below, but major three-star resistance does not begin until Tuesday’s settlement of 4505 in the S&P and 14,654-14,690 in the NQ. Our Pivots and point of balance will be critical in finding early direction, these come in at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (May)
Yesterday’s close: Settled at 114.93, up 5.66
Fundamentals: Crude Oil is up 11.35% this week as the EU considers sanctions on Russian Oil. Of which, 5.18% came yesterday; added tailwinds were found due to the CPC pipeline shutdown and as President Biden travels to Europe to meet with officials on pressuring Russia with potential Oil sanctions. In the meantime, the overnight strength was capped by purchases of Russian Oil from India and China, as well as an update on the CPC pipeline. India’s IOC, the country’s top refiner, purchased Russian Oil for the second time this month. Also, Kazakhstan’s CPC pipeline, where 1.2% of world Oil flows, has a firmer timeline of returning within a month. Yesterday, it was feared the outage could last up to six weeks.
Technicals: We remain cautiously bullish from a trading perspective, but believe higher prices are in the cards fundamentally over the intermediate to longer-term. However, as we highlighted in yesterday’s Midday Market Minute, there is a thick area of resistance from $117 up to $120. Previous resistance at 112.65-113.41 is now support, but it is our momentum indicator that can signal some near-term exhaustion as a point of balance at … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled at 1937.3, up 15.8
Silver, yesterday’s close: Settled at 25.189, up 0.285
Fundamentals: Gold and Silver are carrying yesterday’s strength into today, with Gold tapping 10-day highs. The firm tape comes despite another rise in yields and strength in the U.S. Dollar. There are clear safe-haven tailwinds from the news flow as NATO increases its presence on the east and North Korea performs its largest ICBM test since 2017. These headlines are underpinning the U.S. Dollar, whereas the rise in commodity prices and the need for the Fed to combat such inflation has opened a trap door for Treasuries into quarter-end. Gold seems to have found its positive balance from all, as the fear of slowing growth mounts. Despite a fresh post-pandemic low in Initial Jobless Claims, Durable Goods whiffed. We now look to U.S. Flash PMIs at 8:45 am CT. Also, the hawkish Fed Governor Waller is set to speak at 8:15 am CT. Next, Chicago Fed President Evans speaks at 8:50 am CT and Atlanta Fed President Bostic follows at 10:00 am CT, neither are 2022 voters.
Technicals: The tape is very constructive, and we remain cautiously Bullish. Gold and Silver have both used strong levels of support to catapult higher as the week has unfolded. As we noted yesterday, they are not in the clear, but merely retesting some of the significant damage that took hold through the March 14th collapse. Gold is chewing through first key resistance at 1948-1952 but still faces major three-star resistance at … Click here to get our (FULL) daily reports emailed to you!
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