Market Overview – Morning Express
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4470, up 5.50
NQ, yesterday’s close: Settled at 14,600, down 9.50
Fundamentals: Walmart’s early earnings release helped bring U.S. equity benchmarks out of their overnight funk. The company’s stock is up more than 2% after topping estimates and comes a day after strong Retail Sales signaled the consumer is still alive. Although the company battled supply chain and Covid leave costs through the holiday season, the upbeat report could be a bellwether for the retail sector, who reports over the next two weeks. Yesterday, the S&P pinged our buy target at 4420 and the NQ battled at rare major four-star support, but U.S. benchmarks found relief from the Federal Reserve’s January Minutes to finish strongly. It is important to remember these Minutes came ahead of a strong jobs report, St. Louis Fed President Bullard’s hawkish comments and hot inflation. The less hawkish tone invited buyers to the party, but they received a stark reminder at 9:30 pm CT that geopolitics are still driving near-term swings. As we move closer to the open, the Ukraine-Russia saga remains at the forefront and a U.S. envoy to the U.N. said there is evidence on the ground that Russia is moving toward an “imminent invasion” and “this is a crucial moment”. U.S. Secretary of State Blinken is expected to speak on “Russia’s threat to peace and security” at a U.N. security council meeting at 9:00 am CT. Developing now, Russia has expelled the U.S. Ambassador.
Weekly Jobless Claims came in higher than expected and fresh Philly Fed Manufacturing for February missed expectations. St. Louis Fed President Bullard is expected to speak at 10:00 am CT and Cleveland Fed President Mester follows at 4:00 pm CT.
Technicals: Price action remains in a consolidation pattern; rally attempts in the S&P are slowing near the halfway point of the range over the last week and selling is slowing into Tuesday’s European open spike. Although the NQ has traded and settled decisively out above its halfway point, it has been capped by major three-star resistance at 14,655-14,671. In fact, there are multiple layers of overhead resistance that have become a serious headwind, slowing rally attempts. Those levels are detailed below, but if price action in the S&P can get above our rare major four-star resistance, we envision it welcoming strong buy volume. To the downside, the tape is bleeding through our momentum indicators, denoted as our Pivots. We still view major three-star support at 4440-4446 as significant, but a break below major three-star support at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (March)
Yesterday’s close: Settled at 93.66, up 1.59
Fundamentals: The day-to-day swings are widening with the on again, off again escalations at the Ukrainian border. Now, news of an imminent Iran Nuclear Deal has added an extra layer of volatility. Ultimately, news of fast-moving progress for a deal will bring much needed barrels to alleviate the OPEC+ shortfall. Still, further disruptions can emerge if Russia invades Ukraine. There are ongoing developments, as noted above. The U.S. finds evidence on the ground that Russia is moving toward an “imminent invasion” and “this is a crucial moment” and U.S. Secretary of State Blinken is expected to speak on “Russia’s threat to peace and security” at a U.N. security council meeting at 9:00 am CT. Russia also just expelled the U.S. Ambassador in a sign that tensions are mounting.
Technicals: Yesterday’s plunge held out above Friday’s low of 89.19, but quickly sliced through significant support at 90.66-90.97. As prices rally, we will still look for balance out above this 90.66-90.97 level upon fresh waves of weakness. For now, the strength pins the tape back above our momentum indicator at … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (March)
Gold, yesterday’s close: Settled at 1871.5, up 15.3
Silver, yesterday’s close: Settled at 23.605, up 0.263
Fundamentals: Gold is getting a much-needed boost through resistance on the re-escalation at the Ukrainian border and a slate of underwhelming economic data. Per our description in the S&P/NQ section, the U.S. believes a Russian invasion of Ukraine is imminent, the U.S. Secretary of State will address the U.N. at 9:00 am CT, and Russia has expelled the U.S. Ambassador. If these tensions continue to escalate, it is likely to see Gold test significant technical resistance at our rare major four-star level. Additionally, fresh February Philly Fed Manufacturing and Initial Jobless Claims both missed expectations. St. Louis Fed President Bullard is expected to speak at 10:00 am CT and Cleveland Fed President Mester follows at 4:00 pm CT.
Underpinning Gold’s longer-term strength is the potential of peak Fed hawkishness, right here, right now. We have been adamant of our belief the U.S. Dollar tops at the onset or early stages of a hiking cycle, and we view this to be very bullish on Gold.
Technicals: Gold traded exactly $1900 as headlines mounted but has begun a retreat. What matters on this back and fill is if it can hold constructively out above what is now major three-star support aligning with previous resistance at 1879.5-1883.3; holding out above here will pave a path of least resistance to our rare major four-star level at … Click here to get our (FULL) daily reports emailed to you!
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