E-mini S&P 500 (June)
Yesterday’s close (Tuesday, April 17): Settled at 2706.50, up 24.75
Fundamentals: The breakout above major four-star resistance continues, but so does the lack of participation; volume this week has been at the lowest of the year. However, yesterday’s rally was fairly broad being led by tech. Despite good earnings, the banks are fighting to hold ground and have underperformed greatly given the landscape. European benchmarks are clinging to gains on the week with a quiet session while the Nikkei is up more than 2% today. Major Chinese benchmarks are bouncing back this morning, they are down about 5% during the last 30. We said this yesterday, but this is something to keep an eye on. Additionally, we do not understand why media headlines point to strong data from China Monday night, we viewed it as poor.
President Trump has pointed to Russia and China in order to keep them from beginning to devalue their currency. He is meeting with Japanese Prime Minister Abe this week and there is traction on a meeting with the North Korean dictator Kim Jong Un. The de-escalation of geopolitical tensions from Syria to North Korea has been a huge catalyst in this strong week. Earnings continue to heat up and Morgan Stanley among others are due before the bell today and American Express will take center stage after the bell. Eurozone CPI data was a soft this morning and the Bank of Canada meets at 9:00 a.m. Central. Outgoing NY Fed President Dudley is on the calendar at 7:30 a.m. Central and we look to him and Fed Governor Quarles later in the day as well. The Fed’s Beige Book is due at 1:00 p.m. Central.
Technicals: The S&P flirted out above major three-star resistance yesterday but failed to secure the settlement above. Price action into this morning though is leaving little doubt as it pushes to new swing highs. First key resistance does come in at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude oil (June)
Yesterday’s close:
Fundamentals: Early weakness in crude oil was abated after a test to major three-star support. Price action steadily rose into options expiration and ahead of inventory data as analysts pointed to draws with the seasonally bullish time of year coming upon us. Additionally, now that we are through options expiration, Friday’s OPEC Meeting is likely to rebuild some premium in the sector. Traders should now be using the June contract. API data yesterday showed a draw of 1.047 mb of crude when a build of 625k was expected. The API also reported draws on the products and price action has traded about a dollar from yesterday’s low. Expectations for today’s EIA report come in at -0.5 mb crude, -0.227 mb gasoline and -0.268 mb distillates. With price action already elevating on yesterday’s API reports, bulls do want to be cautious and compare today’s official release to yesterday’s API data and not just relative to the EIA expectations. Production data will be key, and we maintain that a steady increase is already priced in.
Technicals: Price action held major three-star support yesterday at 65.36-65.49 in the May contract yesterday with a session low of 65.56 before working its way higher. The settlement was not out above the May pivot at 66.55-66.87 but the tape has firmly moved out above there today. We brought a Bearish perspective to the mix as we looked for the combination of geopolitical premium being reduced and options expiration to weigh on the market; this time has passed. We have first key resistance in the June contract.
Gold (June)
Yesterday’s close: Settled at 1349.5, down 1.2
Fundamentals: Gold fought off strong waves of selling early in the yesterday’s session upon strong housing data and Industrial Production. Quietly though, Silver is trying to take the reins for the next leg higher. Silver did not pull back much yesterday and as is now out above the elusive 200-day moving average and testing the psychological $17 per ounce mark. All the while, over the last 24 hours, the Dollar has not legged lower. We remain unequivocally Bullish in Bias on both Silver and Gold and as Bill Baruch stated in the Kitco interview (link yesterday), Silver has the best risk versus reward out there. The Fed’s Beige Book is due at 1:00 p.m. Central. Outgoing NY Fed President Dudley is on the calendar at 7:30 am CT and we look to him and Fed Governor Quarles later in the day as well.
Technicals: Gold’s grind back to and settle above first key resistance at 1348.8 yesterday said how technically strong this market is. Furthermore, the daily chart is building a beautiful bottoming pattern. If Silver gets going, the sector is most bullish when the two work in tandem. There are two resistance levels in Silver we are eyeing, the first is... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Natural gas (May)
Yesterday’s close: Settled at 2.738, -0.014
Fundamentals: Natural Gas has stayed elevated above the pivot and weather remains unseasonably cold. While a draw is expected on tomorrow’s storage read, next week’s injection is now in question and this is keeping a bid under the market.
Technicals: While the door was open for the bears yesterday, the fundamentals have buoyed price action. Still, major three-star resistance at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
10-year Treasuries (June)
Yesterday’s close: Settled at 120’18, up 0’03
Fundamentals: The two-year traded to the lowest level since August 2008 while the 10-year ticked up and the 30-year gained. While we have been very Neutral the 10-year on its own, we have been adamantly favoring a flattening yield curve. Yesterday, the curve was the flattest since 2007. On a regular occasion, we ask readers here to call our trade desk at 312-278-0500 to discuss how to play this.
Technicals: Price action continues to hug the 120’15 pivot and is once again attempting to build a bottom but this time at key support at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.