Market Overview – Morning Express
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4168.75, down 29.75
NQ, yesterday’s close: Settled at 13,267.00, down 53.75
Fundamentals: It is staging day ahead of tomorrow’s CPI. In recent sessions, headlines have caused violent swings across U.S. equity markets and yesterday’s whipsaws were no different. After a poor finish Tuesday, ahead of the opening bell, the White House announced it will ban Oil and LNG imports from Russia. This left the sellers in control before stabilizing at the typical 10:00 – 11:00 am CT hour. Stocks then ripped higher on a headline saying Ukraine will not apply for NATO membership. Bill Baruch discussed this during the Midday Market Minute as likely known news the market had not fully discounted. The rush of buying was realized, resistances were achieved, and the excitement quickly dissipated after Russian President Putin signed a decree restricting the export of raw materials through yearend. Again, U.S. equity benchmarks were slammed, ultimately retesting and finishing near session lows. Maybe the negativity was flushed out, maybe all sellers have sold ahead of CPI or barring new headlines. Regardless, benchmarks have been grinding higher since their reopen, trading significantly positive on the session and retesting the scene of yesterday’s crime. We provided this description to help exude the difficulty in navigating such wartime headlines and how it is imperative to allow for wiggle room when positioning, because whether you are bullish or bearish, we do not know when the next headline hits.
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Today’s economic calendar brings JOLTs Job Openings at 9:00 am CT, Weekly EIA Petroleum Report at 9:30 am CT, and the U.S. Treasury auctions $34 billion of 10-year Notes at noon CT. Last night, China’s inflation gauges were firm as the country comes out of virus headwinds. CPI beat at +0.6% MoM versus +0.3% expected and PPI YoY topped by one tenth.
Technicals: Another premarket run-up, will this rally stick? Our battleground area has not changed, it remains 4212-4222. Given oversold conditions, if the bulls can keep price action above this mark, they have a shot at a strong rebound day. For this reason, we have a cautiously Bullish Bias. We find the NQ’s point of balance a bit lower at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (April)
Yesterday’s close: Settled at 123.70, up 4.30
Fundamentals: Headlines are driving the price of Crude between the Sunday night high of $130.50 and support aligning with Friday’s close at 115.53-115.68. The fact price action could not stretch to a new high after the White House announced a ban of Russian Oil and LNG imports certainly laid the groundwork for a reprieve from yesterday’s elevated levels. The tape remained heavy and simply exhausted in the near-term ahead of weekly EIA data, from these elevated levels Moments ago, an aide to Ukrainian President Zelenskiy said the country is ready for a diplomatic solution; markets responded, and Crude traded lower. Another headline followed, that Ukraine will not surrender a “single inch” of territory. This put into perspective what we just discussed in the S&P/NQ section.
Draws in the products last night from the private API survey, including -5.485 mb of Distillates, and another drop at Cushing, helped support prices overnight. Expectations for today’s official data are -0.657 mb Crude, -2.105 mb Gasoline, and -1.914 mb Distillates.
Technicals: It would make sense for the price of Crude to begin coming in from a fundamental standpoint; most of the hawkish news has been fleshed out and there has been more talk of a solution in the last 24 hours from Ukraine than at any point over the last two weeks. Still, there is strong support underpinning this market and that starts with 115.05-115.68. A reversion to the mean cannot begin until this level is decisively broken and the next stop would likely be … Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled at 2043.3, up 47.4
Silver, yesterday’s close: Settled at 26.895, up 1.175
Fundamentals: Given what we just discussed in the Crude Oil section, the rhetoric out of Ukraine is increasingly shifting towards the desire of a solution, we could have just witnessed a near-term top in Gold. Listen, you may not want to hear this but the writing was on the wall; a parabolic move higher yesterday that could not clear the August 2020 high and a gasp for air overnight that was lower than yesterday. Take a deep breathe, this is okay! As long as you capitalized on something. We never imagined Gold breaking out this year due to the Russia-Ukraine conflict, however, we envisioned it breaking out due to ongoing geopolitical tensions around the globe, slower growth, and a less hawkish Federal Reserve. These narratives are still lining up perfectly.
Technicals: The retreat from overnight highs certainly builds a near-term topping formation. What matters moving forward is whether Gold can build constructive groundwork at elevated levels in order to make a push through $2100 in the not-too-distant future (maybe as late as this summer). Initial selling stabilized with Gold testing key support at 1980-1985 and Silver 26.15-26.37. Of course, Silver then has its previous ceiling at 25.72-25.88 that will also act as big support. However, it is the levels below there that matter most, and it will be Gold’s path that can avoid unrepairable damage; we have major three-star support at … Click here to get our (FULL) daily reports emailed to you!