Market Overview – Morning Express
– Russian President Putin recognizes two breakaway regions of Ukraine, Luhansk and Donetsk.
– Regions have been controlled by pro-Russian separatists since 2014
– West sees the move as a dramatic escalation
– Russian “peacekeeping” forces move into the regions.
– Putin’s speech took place after the equity close of Monday’s holiday shortened session.
– EU has proposed sanctions and Germany halts Nord Stream 2 pipeline.
– The world now waits on the West to respond.
– S&P gapped lower on the reopen, down 2% to 4250, lowest since January 24th.
– Peak negativity? Goldman Sachs said, “outright Russia-Ukraine conflict and punitive sanctions could push stocks another 6% from Friday’s close”.
– Things are never as worse as they seem, within that moment.
– Low came within first 30 minutes of trade and S&P unchanged at onset of U.S. hours.
– Gold spiked to a high of 1918.3, testing rare major four-star resistance. Has backed off.
– U.S. 10-year yield slipped to low of 1.85% and has rebounded.
– Expiring and untradable March Crude spiked to 96.00. Front month April reached 94.95 and has fallen 2%, while still up 3% on the session.
– Flash PMIs for February from Europe yesterday were strong, but manufacturing was dragged by Germany. Very robust out of the U.K.
– Case Shiller Home Price Index is due at 8:00 am CT.
– U.S. Flash PMIs for February due at 8:45 am CT
– CB Consumer Confidence due at 9:00 am CT along with Richmond Fed Manufacturing.
– U.S. Treasury auctions $52 billion 2-years today, $53 billion 5-years tomorrow, and $50 billion 7-years on Thursday.
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4343.50, down 31.00 on Friday and 66.00 on the week
NQ, yesterday’s close: Settled at 13,966, down 168.75 on Friday and 244.50 on the week
– Risk-off into Friday’s close. From Thursday’s settlement, today’s low in the S&P is 4.9%. Makes you realize how efficient markets are. Especially when that 4250 is closely aligned with broad support.
– We took a cautiously Bearish Bias in the back half of last week. We are Neutralizing that now.
– NQ settled Friday right at low settlement of January. Pac-man licking his chops into the holiday hours and cleaned up.
– Some peak negativity in near-term paved way for bounce.
– Would not be surprised to see S&P chop a bit between 4100 and 4500, yes new low still possible before Fed’s March meeting.
– Tape buoyed by our momentum indicators ahead of the open, denoted as first key supports below.
– The overnight rebound ran into strong major three-star resistance aligning at 4355 in the S&P and 14,164 in the NQ.
– Floor still seen at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (April)
Yesterday’s close: Settled at 90.21, up 0.17 on Friday and down 1.21 on the week
– Nice bull-flag pattern with slightly lower highs and slightly lower lows was quietly built through last week
– Spike, geopolitical of not, has tremendous technical tailwind. Confirmation for next leg needed with a close above major three-star resistance at 93.50-93.83, April contract high.
– Some capitulatory-ness within today’s spike, ups the ante on toady’s close.
– Bank of America joins Citi in the call for lower Crude. BoA says $80 as “demand retraces”.
– Nigeria said no need to expand Oil production increases.
– Iran Nuclear Deal, how close? Impact from Russia? How much already discounted
– Major three-star support aligns multiple technicals with our momentum indicator at … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (March)
Gold, yesterday’s close: Settled 1899.8, down 2.2 on Friday and up 57.7 on the week
Silver, yesterday’s close: Settled at 23.992, up 0.117 on Friday and 0.623 on the week
– Back out of the forest to see the trees, do not get caught in Gold’s geopolitical euphoria.
– We like Gold a lot this year and believe a new record high can be achieved.
– However, price action is running into rare major four-star resistance at 1919.2-1930.3
– We do not see this level being taken out without a near-term pullback unless full blown war breaks out.
– Silver has lagged and has tremendous technical headwind.
– U.S. Dollar still subdued from recent highs, and this is underpinning rally along with geopolitics
– Cannot ignore retreat in 10-year futures, higher yields from the overnight. A near-term headwind.
– Probability of 50 basis point hike in March now only 30.8%. We expect these probabilities out to December to erode in the coming months and become a bullish tailwind to Gold.
– Our momentum indicators, denoted as our Pivots below, have caught the tape and could exude some near-term exhaustion upon slipping below.
– Our patience points to a tremendous buy opportunity in Gold just as it squeezes longs who chase, at … Click here to get our (FULL) daily reports emailed to you!
You can sign up for a free trial here: https://www.bluelinefutures.com/free-trial
https://www.bluelinefutures.com
20220222
