Market Overview – Morning Express
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4535.00, up 30.75
NQ, yesterday’s close: Settled at 14,994.75, up 89.75
Fundamentals: U.S. benchmarks finished a healthy session yesterday by decisively clearing technical resistance. Buying in the final minutes took the S&P out above its 50% retracement at 4510.50 and strong earnings from both Alphabet and AMD helped the NQ clear its 200-day moving average. In yesterday’s Midday Market Minute, we noted the easy money in the Tech rebound had been made. We still hold this belief, but now find the market potentially entering FOMO territory. It will be all-important for traders and investors alike to stick to their gameplan. As we expressed here yesterday, there is a long road ahead and this week’s calendar alone will prove to be a gauntlet. This morning, Eurozone CPI was hotter than expected at 5.1% versus 4.4% and the private ADP survey showed 301,000 jobs were lost in January. This comes ahead of tomorrow’s ECB meeting and Friday’s Nonfarm. Earnings this morning were broadly strong, but all eyes will be on Meta after the close.
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Technicals: Price action remains firm, and a clear path of least resistance higher has been established. However, we want to reiterate the importance of not chasing this tape; patience pays. Regardless, we find the market in melt-up territory while the S&P holds out above … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (March)
Yesterday’s close: Settled at 88.20, up 0.05
Fundamentals: Crude spiked to a high of 89.72 after OPEC+ kept stride, adding 400,000 bpd in March. This was widely expected, but as we noted here and in our Midday Market Minute, Goldman Sachs was talking Crude lower by saying OPEC+ could bring production back at a faster pace. This projection contradicted OPEC+ analysis yesterday that said there will be a surplus this year. It seemed like nothing more than Goldman trying to talk price action lower for a buy opportunity. We believe this also provided tailwind to the spike this morning.
Inventory data will now be front and center with the EIA report due at 9:30 am CT. Yesterday’s private API survey pointed to a surprise draw of 1.645 mb of Crude and larger draw of Distillates than expected of 2.508 mb. However, this was offset by a larger than expected increase in Gasoline stocks at 5.816. Expectations for today’s official report are +1.525 mb Crude, +1.645 mb Gasoline, and -1.492 mb Distillates. Remember, keep an eye on Cushing. API projected -1.031 mb and a larger draw will help underpin prices.
Technicals: All things considered; we see nothing slowing this rally. However, if you have been long and following our Bullish Bias, there are times to lock in gains. We feel that today’s post OPEC+ spike is a time to do that, especially ahead of EIA and the gauntlet to finish out the week. Still, the bulls are in the driver’s seat and price action is out above our momentum indicator, which stands at … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (March)
Gold, yesterday’s close: Settled at 1801.5, up 5.1
Silver, yesterday’s close: Settled at 22.595, up 0.202
Fundamentals: Gold and Silver struggled to hold yesterday’s early gains. In fact, Gold slipped by 1% to an overnight low of 1794.6. Prices began working higher this morning as the U.S. Dollar weakened on outflows to Europe after stronger than expected CPI boosted the German 10-year to a high of +0.058%, matching the highest level since April 2019. Also, ADP Payrolls showed 301,000 jobs were lost in January. Gold spiked to 1808.8 on the news but has since retreated. As we noted in our Midday Market Minute yesterday, price action is in a consolidation phase of indirection. Still, we remain upbeat, but traders must stay nimble moving into the back half of the week.
Technicals: Ranges are tightening up a bit and this typically signals a directional move is around the corner. For now, Gold is trading at and just above our momentum indicator, noted as our Pivot below and we find this supportive on the session. Still, there is strong overhead resistance and if such a weak ADP is not a catalyst to break range, we may not find one until tomorrow’s central banks and Friday’s Nonfarm. Remember, a close below … Click here to get our (FULL) daily reports emailed to you!
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