Market Overview – Morning Express

E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4253.75, up 90.25
NQ, yesterday’s close: Settled at 13,949.75, up 500.25
Fundamentals: Houston, we have a lift off. The Federal Reserve hiked 25 basis points yesterday in their first such move since 2018. Although they are severely behind the curve, one must hand it to the committee in preparing the market and its participants. Fed Chair Powell soothed a wave of risk-off early in his press conference. He acknowledged a “misalignment” in labor markets but denied a wage-price spiral, pointed to preparing for lift-off since December, reiterated he anticipates inflation to return to 2% while the labor market remains strong, and cautiously invited the balance sheet run-off conversation into the May meeting. Now, the probability of an additional 75 basis points of hikes through the June meeting (May and then June) has mounted to 83.4%.
The focus shifted back to the Russia-Ukraine war after the U.S. promised to send $1 billion in military aide and President Biden called Russian President a “war criminal”. Although no one outside of Russia is disputing President Biden’s comments, it has certainly re-escalated tensions. Bonds, Gold, and Crude Oil are all higher.
The Bank of England met this morning and raised rates by 25 basis points, as expected, to 0.75%. From the U.S., weekly Jobless Claims beat expectations, with Continuous Claims hitting a new post-pandemic low. Also, fresh March Philly Fed Manufacturing and Building Permits for February both topped estimates.
Technicals: Yesterday’s whipsaw upon the Fed announcement pinged strong levels of support perfectly in the S&P and NQ, catapulting them to new swing highs. The rally forced short-covering into the close and three times the normal post-settlement volume was realized. After squeezing, the rally stalled upon today’s reopen, last night. As price action comes in, we have major three-star support in both the S&P and NQ that will define whether yesterday’s late strength can be quickly reinvigorated. If not a trap door could be opened below … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (April)
Yesterday’s close: Settled 95.04, down 1.40
Fundamentals: Crude Oil is in rebound mode, regaining $100 ahead of today’s options expiration. The rally is being underpinned by a re-escalation of the Russia-Ukraine war. After what seemed like progress towards Ukraine neutrality, they rejected Russia’s one-sided offer and President Biden called Russian President Putin a “war criminal”. Since then, Ukraine has said it wants its borders recognized as of 1991, the Kremlin has called President Biden’s comments unforgivable, and European nations such as Germany are inquiring about elevating their military defense systems. UK Prime Minister Johnson is also now taking an approach, trying to encourage Saudi Arabia and the UAE to increase production. Remember, those are the only two OPEC+ nations that have the capacity to increase production past pre-pandemic levels. Progress on the Iran Nuclear Deal has eroded and yesterday we noted how the IEA anticipates as much as 3 mbpd from Russia to become shut in next month.
Technicals: We have maintained a very Neutral approach in recent days due to volatility but have noted those who can patiently position are likely to find value between 96.17-96.47 and rare major four-star support at 91.59. The rise back above $100 pins rare major four-star resistance back into the mix, the scene of the crime that aided the flush this week, at 103.01-103.61. We expect this level to be tested as long as price action holds above our Pivot and point of balance at… Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled at 1909.9, down 20.5
Silver, yesterday’s close: Settled at 24.71, down 0.448
Fundamentals: Gold and Silver slipped momentarily after the Federal Reserve announced lift-off, but quickly rebounded along with risk-assets as Fed Chair Powell delivered his speech (discussed in the S&P/NQ section). The precious metals landscape is finding added safe-haven tailwinds on what is being seen as a re-escalation of the Russia-Ukraine conflict. Momentum may have shifted back to the bull camp after battling at technical support, but the near-term environment remains fickle. Today’s economic data from the U.S. has overall been better than expected and prices have retreated from session highs ahead of the opening bell.
Technicals: We have maintained a cautiously Bullish Bias amid this week’s volatility but are ready to shift to a more Bullish outlook, per the below. However, we must see continued construction in Gold out above 1923.7-1931.5 through the close of the week. Yesterday’s post-Fed slip in Gold tapped our next major three-star support level at 1894.5, before rebounding. Silver left a gap at its pre-Fed settlement, which can be seen as bullish. Per this description, you can see our constructive opinion, furthermore, both Gold and Silver are holding out above our momentum indicators, but they must continue to; for Gold this aligns as first support and for Silver, it is our Pivot at … Click here to get our (FULL) daily reports emailed to you!
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