Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, Natural Gas and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on MoneyShow.com. Join his presentation at TradersExpo Chicago July 24 on Risk Management.
Bill Baruch’s Mid-Day Markets short video here.
E-mini S&P (September)
Monday close: Settled at 2722.25, down 32.25
Fundamentals: The September S&P lost more than 2% yesterday and traded to the lowest level of the month at 2700.50 before the president’s trade advisor, Peter Navarro, spoke on CNBC less than an hour ahead of the close. The purpose of his appearance was to calm the panic and he succeeded, the S&P (SPX) and NQ both ripped about 1% from their session low. Monday buzz was something that we have been talking about since last week, that the White House will announce restrictions on Chinese investment in the U.S and limit tech exports before the end of the week.
Furthermore, it was revealed in a Wall Street Journal report late Sunday that they would prevent companies with at least 25% Chinese ownership from buying businesses with what was defined as “industrially significant technology.” Although Navarro did not give an official statement negating such, he jawboned that the reaction was exacerbated and that the plan is less significant.
Monday price action broke below two levels of major three-star support, we will discuss this in the Technical section below, but what this has done is bring back the fundamental fear barometer while below 2745.50-2748.25.
Technicals: The S&P fell as much as 59 points Monday and traded through two levels of major three-star support. The first is now a line in the sand to keep the volatility high and the bears in the driver’s seat at ...
Today’s economic calendar
Today, we are looking to a critical read on June Consumer Confidence which has consistently been near the highest level in almost two decades. Although, it is expected to again retreat from its peak in February, a larger miss will show growing angst in the consumer due to trade, six months removed from tax reform. U.S. consumer sentiment cooled in June, according to the Conference Board Tuesday morning.
S&P CoreLogic Case-Shiller Housing Index: reported a 6.4% annual gain in April in the in the US National Home Price NSA Index, down from 6.5% the previous month.
Richmond Fed Manufacturing: reported the composite manufacturing index rose from 16 in May to 20 in June, buoyed by shipments, new orders and employment.
Atlanta Fed President Bostic speaks at 1 p.m. EDT
Dallas Fed President Robert Kaplan speaks at 1:45 EDT.
Treasury auctions this week and the 2-year at 1 pm EDT.
Crude Oil (August)
Monday close: Settled at 68.08, down 0.50
Fundamentals: Crude Oil got a little ahead of itself on Friday and price action came back in a bit Monday. However, it has held tremendously well, given Monday weakness in equity markets. While U.S and China trade tensions do bring heightened concerns to the Crude market and global growth, China left Crude Oil off the list of first round items due to be imposed on July 6.
This brings a bit of a cliffhanger that is likely holding back further gains while equity markets are weak. The reality is that the Oil market is well balanced and due to sanctions on Iran and Venezuela, as well as outages in Venezuela, Libya and others, the risk of a supply deficit has become greater. Bill Baruch discussed the Crude trade on CNBC’s Trading Nation yesterday.
Technicals: Crude did fall back to settle below our pivot at 68.42-68.52 which somewhat neutralizes the immediate-term bullish leg. We have adjusted this level slightly to ...
Gold (August)
Monday close: Settled at 1268.9, down 1.8
Fundamentals: Gold traded very poorly Monday given that the Dollar Index (DXY) lost 0.25% and equity markets were down 2% on what equates to geopolitical tensions due to trade. Today, the Dollar Index has regained that 0.25% and equity markets have stabilized just a bit; of course, Gold has shed 1% and at the lowest level since bottoming mid-December. Today, we are really eyeing the June Consumer Confidence read. After Philly Fed Manufacturing and Manufacturing PMI missed Thursday and Friday, this will give the heartbeat of the consumer; if this begins to fallout due to trade fears, Gold cannot allow that to go unnoticed.
Technicals: Gold is now below Thursday’s marginal reversal low of 1262.4. Ultimately price action struggled to get above first key resistance Monday when it had every fundamental and technical reason to do so. We remain long-term upbeat this market because we do believe $1300+ will be revisited soon enough.
Given today’s move, we imagine that Gold is at or close to a net-short position; today’s action will show up on Friday’s CoT. Our rare major four-star support level comes in at ...
Natural Gas (August)
Monday close: Settled at 2.921, down 0.024
Fundamentals: Weather across the Midwest and East Coast remains moderate for this time of year with temperatures touching 90 degrees but not staying thoroughly above. Overall though, Natural Gas stocks are 757 bcf less than last year and 499 bcf less than the 5-year average. Builds are on track over the coming weeks but any surprise in weather should knee-jerk this market back above $3.
Technicals: Price action is again battling at the low end of its range, however, major three-star support which aligns many key technical indicators sits ...
10-year (September)
Monday close: Settled at 120’01, up 0’065
Fundamentals: Trade tensions have kept a bid under the Treasury complex. However, prices are not screaming higher and remained rather contained. As the week unfolds, we expect volatility to remain in markets across all sectors and this will play favorably to the Treasury complex.
Morgan Stanley put out a note over the weekend saying that the high of the 10-year yield for the year is in and this aligns with our belief though we are prepared to see waves of sharp selling upon a calming geopolitical landscape.
But our motto all year has been that those waves of sharp selling that bring the yield above 3% is a Buy opportunity for prices.
Still, there are auctions this week and the 2-year at 1 pm EDT.
Technicals: Our Bias has leaned Bullish all year and price action is out above first key resistance. However, it is not accelerating above such. The question for today’s session is whether ...
