Market Overview – Morning Express
Market Overview – Morning Express
E-mini S&P (March) / NQ (June)
S&P, yesterday’s close: Settled at 4175.75, up 52.25
NQ, yesterday’s close: Settled at 12,776.75, up 261.25
Fundamentals: E-mini S&P and NQ futures finished strongly yesterday, ping-ponging before melting higher in the aftermath of Fed Chair Powell’s brief interview at the Economic Club of Washington D.C. Powell did not walk back last Wednesday’s dovishness and reiterated the “disinflation” process has begun. Risk-assets initially surged on those comments. While the S&P and NQ were led by zero- and one-day option flow, the U.S. Dollar Index dipped back below 103, and the Treasury complex spiked. As the interview unfolded, he explained Friday’s jobs report was very strong, and if the economy continued to trend in that direction, the Fed would have to raise rates more than markets have priced-in. The initial move across assets eroded, leading to a complete reversal of the S&P to make new session lows. Well after Powell was done, 4100 in the S&P held a huge technical level and paved the way for another option-fueled pump; both the S&P and NQ made a run at Friday’s intraday highs of 4194 and 12,878, falling just shy.
Do not miss our Midday Market Minute, from yesterday.
Fed Chair Powell was the highlight of the week, and we now look to a deluge of Fed speak in the coming days. Yesterday, Minneapolis Fed President Kashkari called for a 5.4% terminal rate, and Atlanta Fed President Bostic also pointed to more hikes than markets have discounted, although both are not 2023 voters. New York Fed President Williams speaks today at 8:15 am CT, and Fed Governor Barr follows at 9:00 am CT. Fed Governor Waller is known to be the most hawkish voice, and he speaks at 12:45 pm CT, shortly after the U.S. Treasury auctions $35 billion 10-year notes at noon CT.
Technicals: Price action in E-mini S&P and E-mini NQ futures surged into the close yesterday and held steady overnight before drifting slightly lower this morning ahead of the bell. Resistance aligning with yesterday’s settlements and highs is our first major three-star level, while that aligning with last Thursday’s settlement and Friday’s intraday high creates our second major three-star level, both are detailed in the levels below. A breakout and close above here will fuel the next leg, but one has to wonder when near-term exhaustion kicks in. Though we have several levels of support detailed below current price action, it is clear the line in the sand in order to break the range to the downside has become major three-star support at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (March)
Yesterday’s close: Settled at 77.14, up 3.03
Fundamentals: Crude Oil roared higher yesterday, catching tremendous momentum after holding a critical area of technical support. News that Saudi Arabia raised prices on March loadings to Asia for the first time in six months certainly helped spark a buying spree. The focus will shift domestically to the weekly inventory report. Analysts’ expectations are for +2.457 mb Crude, +1.271 mb of Gasoline, and +0.97 mb Distillates. Refinery Utilization w/w is expected to snap back sharply at +0.7% from -0.4% last week.
Technicals: Price action has roared back, testing into major three-star resistance at 77.90-78.25, aligning multiple indicators with a pocket in which downside volatility began last week. Yesterday, Crude settled out above significant resistance at 76.15-76.59, re-shifting momentum back to the bulls, this level is now support. The bulls will continue to hold a decisive edge while price action is out above first key support at … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (March)
Gold, yesterday’s close: Settled at 1945.3, up 6.1
Silver, yesterday’s close: Settled at 23.836, up 0.103
Fundamentals: Gold and Silver both worked higher overnight, finding support from a broadly softer U.S. Dollar. Near-term action in precious metals will stay closely tied to the movement of the U.S. Dollar and Japanese Yen. A rebound yesterday in the Yen helped buoy Gold and Silver from lows. Still, the U.S. Treasury futures complex finished on session lows into the electronic close yesterday, and if rates continue to edge higher, it provides a difficult near-term landscape for precious metals.
Fed Chair Powell was the highlight of the week, and we now look to a deluge of Fed speak in the coming days. Yesterday, Minneapolis Fed President Kashkari called for a 5.4% terminal rate, and Atlanta Fed President Bostic also pointed to more hikes than markets have discounted, although both are not 2023 voters. New York Fed President Williams speaks today at 8:15 am CT, and Fed Governor Barr follows at 9:00 am CT. Fed Governor Waller is known to be the most hawkish voice, and he speaks at 12:45 pm CT, shortly after the U.S. Treasury auctions $35 billion 10-year notes at noon CT.
Technicals: Gold jumped up to our first wave of major three-star resistance overnight, a level that it also tested during Fed Chair Powell’s interview yesterday. However, it has peeled back from session highs, creating a slightly higher high and slightly higher low for the third day following Friday’s fallout, a well-defined bear flag pattern. The pattern favors a resolution lower, which will be confirmed upon a break below 1873.5, opening the door to our rare major four-star support at … Click here to get our (FULL) daily reports emailed to you!
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