Market Overview – Morning Express
E-mini S&P (December) / NQ (December)
The S&P500, yesterday’s close: Settled at 4565.25, up 7.25
NQ, yesterday’s close: Settled at 15,545, up 49.25
Fundamentals: U.S. benchmarks struggled to hold an exuberant start to yesterday’s session and slipped from key technical levels. Once the early momentum tapered off, Bill Baruch noted in our Midday Market Minute that it was likely to see stocks consolidate into mega-cap earnings. Microsoft and Alphabet both crushed estimates on strong cloud computing and digital advertising. Microsoft is +1.5% premarket, whereas Alphabet is slightly in the red after their CFO noted a minor impact to YouTube revenues due to Apple’s privacy changes. With both priced to perfection, there was no room to disappoint. However, Twitter is up nearly 2% despite missing top and bottom-line estimates after noting Apple’s privacy changes had less of an impact than expected.
Software and social media giants were not the only ones to report. Visa topped estimates yesterday but is in the red after signaling revenue growth will be slower in the upcoming quarter. Among a deluge of reports, both Thermo Fisher and McDonalds reported stronger than expected results and are higher ahead of the bell. Boeing whiffed on top and bottom estimates but is near unchanged as investors await the conference call at 9:30 am CT.
Durable Goods data for September this morning was overall in line with expectations to slightly better, however, last month’s data was revised slightly lower. The Bank of Canada concludes a policy meeting at 9:00 am CT and is expected to continue tapering bond purchases. Weekly Crude Oil inventory data from the EIA follows at 9:30 am CT. The U.S. Treasury will auction $61 billion in 5-year Notes at noon CT and the Bank of Japan holds a policy meeting tonight.
Technicals: Price action remains firm overall, but there were crucial resistance levels pinged yesterday. While we denoted 4587.75 as major three-star resistance in the S&P due to it being a 100% measured move from Friday’s whipsaw, we also looked at it aligning closely with the underside of the trend line from November 2020 or March 2021 in which the S&P broke below on September 17th. As for the NQ, it is no secret that it failed a record high by 1 point on the December contract and 7 points on the continuous. The Russell also slipped by as much as 2% after failing at its trend line from March. Although the path of least resistance has been higher, there are very clear roadblocks. Still, this wave lower in the S&P has not covered the gap from Monday’s close intraday at 4558. This is first key support, and we will look to 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.
Crude Oil (December)
Yesterday’s close: Settled at 84.65, up 0.89
Fundamentals: Crude Oil began slipping after the bell yesterday when API reported surprise builds across the board. The private survey said Crude stocks increased by 2.318 mb, Gasoline by 0.53 mb, and Distillates by 0.986 mb. Today’s official EIA data is due at 9:30 am CT and analysts estimate +1.914 mb Crude, -1.862 mb Gasoline, and -2.311 mb Distillates. Last week broke a streak of bearish reports. Traders should keep a close eye on Refinery Utilization, Net Imports and estimate production data.
Technicals: Price action is peeling back about 2% and trading into Tuesday’s early session low of 82.97. We will look to this as only minor support, with our first key level coming in at 82.50-82.54. While today’s session will be more fundamental in nature, the reaction to today’s data against our technical levels will remain critical. We will look to a close below … 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 (December) / Silver (December)
Gold, yesterday’s close: Settled at 1793.4, down 13.4
Silver, yesterday’s close: Settled at 24.088, down 0.504
Fundamentals: Gold and Silver fell off from key technical levels yesterday as the U.S. Dollar edged higher and despite a higher Treasury complex. However, to their credit, Gold and Silver finished the session off their lows with Bonds helping to underpin the move. Today, the U.S. Dollar is lower, and Bonds are up sharply; Gold should be following suit but simply is not. It is important to note that Crude and Copper are both off by about 2% and this is weighing on the commodity space, while buoying Bonds because it erodes the inflation narrative a bit.
Technicals: Although Gold and Silver slipped sharply yesterday, they did respond to our second layer of major three-star support. Ultimately, a break below the first layer neutralized the immediate strength, but they have held trend by rebounding from major three-star support at 1781.9-1784 in Gold and 23.87-23.96 in Silver. Both are battling at our momentum indicators 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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20211027
