E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4577.75, up 38.50
NQ, yesterday’s close: Settled at 15,164.25, up 300.50
Fundamentals: U.S. equity benchmarks rebounded from last week’s late pullback, pinning both the S&P and NQ at crucial technical levels. News of Elon Musk’s 9.2% stake in Twitter lit a fire under the beleaguered stock, gaining 27%. It paved the way for a strong showing from the heavyweights within Communication Services +2.28% and Information Technology +1.91%. However, Consumer Discretionary was the best performer, kicking off the week with a gain of 2.33%. From there, Energy nudged out a +0.07% as the only other sector to finish positive amid unenthusiastic NYSE breadth. Only 54% of listings were up on the session. We now look to a jam-packed economic calendar that features a deluge of Fed speak, final SPGI Services PMI for March at 8:45 am CT, and the more closely watched ISM Non-Manufacturing read at 9:00 am CT.
Expectations are holding steady at an 80% probability the Federal Reserve hikes rates by 100 basis points through their June 15th meeting. Today we look to comments from Minneapolis Fed President Kashkari at 9:00 am CT, incoming Fed Vice Chair Brainard at 10:05 am CT, and NY Fed President Williams at 1:00 pm CT.
The EU plans to propose billions of dollars of new sanctions on Russia, including a mandatory phaseout of coal. They plan to ban from both Russia and Belarus potash fertilizer, wood, chemicals, concrete, and foodstuffs. Furthering this big step, the German Foreign said this morning that oil and then gas are to follow.
Technicals: Yesterday had the lowest trading volume on the year for S&P and NQ futures, as well as the SPY ETF. For the QQQ ETF, it had more volume than only the first trading day of the year. Considering this along with the unenthusiastic NYSE breadth of 54%, it is hard for us to buy into yesterday’s momentum, which also happens to be flirting with a big area of resistance, on the heels of such an ugly weekly tail last week. The tape ripped higher about 10 minutes after the bell when Tech heavyweights joined Elon Musk’s Twitter party and as we all know, those directional Mondays are rarely derailed. The S&P edged out a settlement above the 4566.25-4575.75 mark, a large pocket that aligned multiple technical indicators with last week’s reversal. However, we find the resistance broader in this type of landscape, with many factors contributing, such as low volume, technical momentum from the last couple of weeks, and a lack of fundamental conviction on either direction. The overnight high of 4587 reached into a gasp for air from last Thursday, about an hour after the opening bell, that aligns more closely with a peak resistance at 4596. As price action retreats, our rising momentum indicator aligns to create a crucial area of support at …. Click here to get our (FULL) daily reports emailed to you!
Crude Oil (May)
Yesterday’s close: Settled at 103.28, up 4.01
Fundamentals: Crude Oil surged through yesterday’s session, and spiked again after reopening last night (on today’s session), reaching a high of 105.59 by 8:00 pm CT. The move comes as the EU proposes sanctions on Coal and plans to follow those with Oil and then Gas. Although expectations for this decision were mounting after the graphic war crimes around Kyiv circulated over the weekend, this is a monumental step that underpins the price of Oil. Bringing additional tailwinds was production data showing Iraq produced 220,000 bpd less than its quota and Russian output slipping by 4% already this month. Weekly U.S. inventory data will also come into the picture through today, ahead of tomorrow’s official release. Early estimates point to -3.016 mb Crude, -0.30 mb Gasoline, and -1.117 mb Distillates.
Technicals: After the early session surge, price action has consolidated very well at and around the 104.55-104.75 mark. This type of price action is very health and sets the stage to retest resistance aligning with last week’s breakdown point, noted below. First support comes in at … Click here to get our (FULL) daily reports emailed to you!
Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1934, up 10.3
Silver, yesterday’s close: Settled at 24.59, down 0.064
Fundamentals: Gold and Silver are enjoying a firm tape on the heels of EU’s plan to implement billions worth of sanctions on Russia, including those on coal. They will also plan to ban from both Russia and Belarus potash fertilizer, wood, chemicals, concrete, foodstuffs. Furthering the ban on access to EU ports, road transport operators, and exports of semiconductors and machinery. This has certainly lit a bid under Gold for both safe have and stable asset purposes. On the economic calendar, SPGI Services PMI was revised lower for March and ISM Non-Manufacturing missed, both bringing an added tailwind.
With Fed speak on the calendar, expectations are holding steady at an 80% probability the Federal Reserve hikes rates by 100 basis points through their June 15th meeting. Remember, we believe this tightening cycle is also a bullish tailwind for Gold looking out the next six to twelve months. Today we look to comments from Minneapolis Fed President Kashkari at 9:00 am CT, incoming Fed Vice Chair Brainard at 10:05 am CT, and NY Fed President Williams at 1:00 pm CT.
Technicals: We remain bullish Gold both fundamentally and technically but expect continued volatility. Today’s rise has run into key resistance at 1944.7 and faces major three-star resistance at a gap settlement at 1954. Similarly, Silver is testing major three-star resistance at 25.19-25.25, a level that has been very sticky. Silver quickly rebounded from a miniature washout yesterday and this has subdued our momentum indicator which aligns as first key support, noted below. As for Gold, our momentum indicator is rising and we find the bulls in the driver’s seat while holding above … Click here to get our (FULL) daily reports emailed to you!