E-mini S&P (September) / NQ (September)
S&P, yesterday’s close: Settled 3937.50, up 103.75
NQ, yesterday’s close: Settled at 12,274.00, up 367.00
Fundamentals: U.S. equity benchmarks powered higher yesterday, rebounding strongly from Monday’s disappointing turn. The session was terrific from start to finish and capped off by an upbeat earnings report from Netflix. The former darling beat earnings estimates and missed on revenues, but it was subscriber numbers that lifted the stock as much as 7%. The company lost 970,000 subscribers in Q2, smaller than the 2 million projected, and expects a return to subscriber growth in the current quarter. Although indices drifted higher in the overnight, macro developments have overshadowed the U.S. open and strengthened the safe haven U.S. Dollar off session lows. Comments from European officials and Russian Foreign Minister Lavrov spiked the Dollar and derailed risk-assets. European Commission President Von Der Leyen said a seventh package of sanctions on Russia is underway, warned of a full cut-off of Russian gas and proposed targeting a 15% reduction of Natural Gas use across all EU countries for August through March. The EU Energy Chief Simon followed by warning of a worse gas crisis in the winter of 2023-2024 without action now and how a gas halt could cut GDP by up to 1.5%. One would think if there were ever a time to abandon or pause unrealistic climate goals, that time is now. Unfortunately, the globalist agenda is about much more than climate and also shoots to erode the prosperity of capitalism. As some may have come to expect, Russia is tactically changing their mission in Ukraine as the war drags on and Foreign Minister Lavrov confirmed that this morning. He noted, “the geographical objectives of Russia’s special operation in Ukraine have changed from the Luhansk and Donetsk regions to a number of other territories.” Also, Nord Stream 1 remains at the forefront, due to scheduled maintenance, and flows of Russia gas via the pipeline are expected to restart tomorrow. Complicating matters has been the ability to mobilize and repair a Russian turbine due to sanctions. Canada did approve and repair the turbine. The EU expects it to be delivered on time to Russia’s Gazprom, however, as the political game continues, Gazprom said this morning it hasn’t received the proper documents to allow for delivery. Despite the macro landscape throwing a wrench in the continuation of yesterday’s strength, the S&P has so far held above Monday’s high.
On the economic calendar, MBA Mortgage Applications fell by 6.3% WoW. This is the third consecutive weekly drop and brings applications to a 22-year low. On the heels of underwhelming new housing data yesterday, we look to Existing Home Sales this morning at 9:00 am CT. The earnings calendar does not boast any mega-cap names before Tesla after the bell. ASML, the Dutch semiconductor equipment company, is holding ground down less than 2% after a disappointing report. On the topic of chips, Speaker of the House Pelosi said the House aims to vote on the chips subsidy bill as early as next week. Her husband purchased $5 million worth of NVIDIA stock in June.
Technicals: Price action is arguably digesting yesterday’s run, but in this environment, there is a thin line between consolidating off the highs and failing. Today, this line can be easily defined; it is imperative the S&P and NQ hold out above support aligning multiple indicators with Monday’s opening range high at 3901.25-3905.25 and 12,152-12,186, respectively. A consolidation of the utmost healthy manner will hold out above first key support in the S&P, detailed below, and our Pivot and point of balance for each, detailed below. Such construction should pave the way for another attempt to chew through major three-star resistance at 3943.50-3950 in the S&P and 12,262-12,305 in the NQ. Ultimately, such should lead price action to our next bullish target in the S&P and NQ at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (September)
Yesterday’s close: Settled at 100.74, up 1.32
Fundamentals: Crude Oil battled through early session weakness yesterday to finish at a five-day high. Price action is going through similar gyrations this morning, shedding more than $2 ahead of today’s EIA inventory data. Last night’s private API survey printed slightly higher builds than expected in both Crude +1.86 mb and Gasoline +1.29 mb, but this was largely offset by a larger draw in Distillates -2.153 mb. The survey also forecast a build at Cushing for the third week a row, lifting inventories at the hub from the lowest level since October 2014. Analyst estimates for today’s official report are for +1.357 mb Crude, +0.071 mb Gasoline, and +1.169 mb Distillates. Remember, these numbers will have an impact within context; SPR release, Net Imports, Refinery Utilization, Cushing, etc. Lastly, yesterday we noted mass testing in Shanghai within our theme, if you test, you will find cases. Such mass testing will be expanded through August, and this could be weighing on the tape.
Technicals: If one has built out a decent long position through last week’s weakness, it is prudent to trim and manage such after testing resistance and ahead of today’s inventory data. With that said, yesterday’s early weakness held a budding crucial level of support aligning with the 8:00 am CT traditional intraday open from Monday. This is now major three-star support at 96.52-96.97 and the bulls are in the near-term driver’s seat while holding out above here. Strong overhead key resistance has been adjusted to align with yesterday’s settlement, but major three-star resistance still lurks above there at … Click here to get our (FULL) daily reports emailed to you!
Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 1710.5, up 0.5
Silver, yesterday’s close: Settled at 18.713, down 0.127
Fundamentals: Gold and Silver have done very little amid the U.S. Dollar Index retreating 2.5% from last week’s spike high, and that is disappointing. However, a monotonous bottoming process is not uncommon upon the rare feat of Managed Money (hedge funds) going net-short (Gold, Silver, and Platinum). The trend is down and there must be a catalyst to create higher prices and lift those shorts from their positions. The risk to being long at this point is a rebound in the U.S. Dollar. Afterall, the trend in the U.S. Dollar is higher, but more crucially, it will be susceptible to swings through tomorrow’s ECB policy meeting. As for today, MBA Mortgage Applications fell by 6.3% WoW. This is the third consecutive weekly drop and brings applications to a 22-year low. On the heels of underwhelming new housing data yesterday, we look to Existing Home Sales this morning at 9:00 am CT. In summary, there is certainly reason for Gold and Silver to gain ground today and consolidate higher ahead of tomorrow’s ECB meeting and breathing room is crucial for the long camp.
Technicals: The trading range for Gold and Silver in both sessions so far this week has been very muted, leaving little to change within our technical landscape below. We could see some short-covering strength ahead of the ECB tomorrow upon a constructive battle at and above our Pivot and point of balance for Gold at … Click here to get our (FULL) daily reports emailed to you!