Market Overview – Morning Express

– Russia-Ukraine conflict worsened, but less uncertainties and risk-assets responded.
– Clarification on the use of ‘less uncertainness’ this week. Markets hate uncertainties and this has been one of our ongoing themes for years. Of course, we do not know when this conflict will end, but simply the fact that is had escalated and Russia has invaded ultimately brings less uncertainties.
– “Buy the invasion”, someone put this chart together and it sums up our theme extremely well. It may have come from Fundstrat’s Tom Lee, but we are not certain. (chart above)
– Equity markets spiked just before 7:00 am CT on news the EU plans to freeze the assets of Russian President Putin and Foreign Minster Lavrov.
– The inflation narrative, via the Fed’s preferred inflation indicator Core PCE is also front and center this morning, due at 7:30 am CT.
– Expectations for January are 5.1% YoY, up from 4.9% in December and +0.5% MoM.
– The read is accompanied by Personal Spending and Income data. Core Durable Goods also due then.
– Pending Home Sales and final February Michigan Consumer data due at 9:00 am CT.
– Odds of a 25-basis point hike in March rose to 95% yesterday and have come off to 79% this morning, with 50-basis points incurring the remaining probabilities.
– Still, four hikes through June 15th meeting have a 55.9% probability.
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4284, up 62.00
NQ, yesterday’s close: Settled at 13,966.50, up 459.00
– We are broadly Bullish in Bias, citing here yesterday, “we have been and will remain nimble with this market. Although we are taking a very Neutral approach here today, we are viewing opportunity from the long side at these levels”.
– The S&P closed back above 4260.50-4276.50 and the NQ closed back above 13,706-13,754; must be Bullish in Bias above these levels.
– Overnight retreat and rebound further solidifies line in the sand at January lows in the S&P at 4212.75-4227.50; a close below here becomes very negative.
– Immediate-term upside target is … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (April)
Yesterday’s close: Settled at 92.81, up 0.71
– How many times have we said, “do not chase the price action”? In this case the invasion rip.
– Price action reverted back to the 92.00-92.25 mark, a critical point of balance.
– Lot of same levels, from before the spike, still valid. As Bill Baruch discussed in the Midday Market Minute, they align with volume, retracements and other indicators that reappear throughout the story the market tells us.
– Crude became under pressure this morning as news broke the EU will freeze the assets of Russian President Putin and Foreign Minister Lavrov. Signals there may not be such dependence on Russia Oil and Gas taking out premium from the market.
– Data from the EIA yesterday was not bullish but another draw of 2mb at Cushing is and signals a tight physical market.
– We have our first layer of major three-star support at … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled 1926.3, up 15.9
Silver, yesterday’s close: Settled at 24.71, up 0.112
– Buy the invasion in stocks, means sell the safe-havens, this means Gold. We hope you did not get FOMO and chase Gold/Silver at elevated levels.
– The upside whipsaw in Gold yesterday is unfortunately similar to the downside whipsaw in August last year.
– Whereas this likely brings a near-term top, we remain Bullish in Bias over the long term.
– We have always believed this is Gold’s year due to the path of Fed policy and not one geopolitical even.
– There will be more geopolitical events this year.
– Yesterday was extremely technical; Silver failed at rare major four-star resistance and Gold failed at 1971 major three-star resistance
– The precipitous drops in each stopped right at massive technical levels, 1878.5-1881 in Gold and 23.87 in Silver.
– Still, we think door open at minimum to … Click here to get our (FULL) daily reports emailed to you!
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