Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, 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 Midday Market Minute video July 23:
Crude oil has traded on both sides of unchanged to start the week, will headline risk subside?
E-mini S&P (September)
Last week’s close: Settled at 2800.75, down 4.50 on Friday and down 2.50 on the week.
Fundamentals: Equity markets around much of the globe are slightly soft to stable to start the week. The Nikkei is down 1.3% on speculation that the Bank of Japan could tighten up the timeframe in unwinding its ultra-loose monetary policy at their meeting next week.
A stronger Japanese yen (JPY) has helped play into the weaker dollar and while the dollar remains a critical theme, none might be bigger this week than earnings. In fact, traders and investors alike have several themes to focus on this week but come Friday’s closing bell, none might be more important than the overall sentiment achieved by earnings.
Earnings are the lifeblood of stocks and they kick into high gear this week with Halliburton (HAL) and others before today’s open while Google’s parent company, Alphabet (GOOGL), will headline the post-bell lineup.
Among some of the large names are Facebook (FB) and Boeing (BA) due Wednesday, Amazon (AMZN) on Thursday and big oil Friday.
The yuan is weaker Monday morning but has not taken out Friday’s low and Beijing “said” it won’t devalue to boost exports. The euro (EUR) is retreating from a band of resistance.
President Trump fired back at Iranian President Rouhani for saying that hostile policies toward Iran would cause the “mother of all wars” saying to “Never, ever threaten the United States again or you will suffer consequences…”. The headline geopolitics are not going anywhere and will be crucial for traders to navigate as each day develops.
We won’t get a response to President Trump’s rate comments from Fed officials this week as they enter a blackout period with next week’s FOMC meeting in focus.
owever, at the G20 Summit, Treasury Secretary Mnuchin reassured that the president supports the Federal Reserve and the strong Dollar.
Technicals: Price action is consolidating at elevated levels and this can be healthy. However, Friday’s trade across the board failed to press through resistance and this is what must not go unnoticed; the S&P failed again at major four-star resistance at 2811.25-2814.25, the Russell 2000 (RUT) is about 0.75% from Friday’s high which failed to hold above Thursday’s high and complete a bullish cup and handle and the NQ closed lower for the third session in a row since trading to a new record high.
Still, none of this is an indication that the market is falling apart, but this is why we must Neutralize our Bias just a bit; to exude relative caution. The S&P (SPX) presented a quick trade buy opportunity last night, trading down to first key support last night at ...
Today’s economic calendar
Chicago Fed National Activity Index was +0.43 in June, up from -0.45 in May.
The NAR Existing Homes Sales decreased for the third straight month in June.
Crude Oil (September)
Last week’s close: Settled at 68.26, up 0.02 on Friday and down 1.69 on the week.
Fundamentals: Price action is moving firmly in the green this morning and through technical resistance (discussed below) after President Trump fired back last night at Iranian President Rouhani for saying that hostile policies toward Iran would cause the “mother of all wars.” (Above.)
This immediate escalation has pushed Crude Oil up 1% on the session. A major catalyst in softening the tape over the last week and a half was a change in rhetoric from the White House, actually saying they would consider relief from U.S sanctions for countries who imported Iranian Crude after the November deadline.
The White House upped their rhetoric last night before the President’s tweet when Secretary of State Pompeo compared the Iranian government to the Mafia a speech. This back and forth has seemingly dented the market’s belief that relief for importers is in reach; our belief is a market without Iranian Crude is bullish.
Technicals: Friday’s close held the pivot and since Thursday morning’s spike price action has battled tremendously at first key support at 67.60-67.90. This has encouraged the bull leg today through first key resistance at ...
Gold (August)
Last week’s close: Settled at 1231.1, up 7.1 on Friday and down 10.1 on the week.
Fundamentals: Gold has had a quiet start to the week as it tests first key resistance (discussed below). The yuan is slightly weaker this morning which has suppressed some buying and was a major catalyst in the overnight dip. Still, the dollar is overall weaker and strength in the yen is a supportive component; Gold may be getting back its old confidant, the yen, ahead of next week’s Bank of Japan meeting. While headlines point to speculation mounting that the BOJ might tighten up its timeframe to wind down their ultra-loose monetary policy, we see this as shorts covering and playing it safe for now.
An uptick in fresh geopolitical concerns between Washington and Iran along with China saying they won’t devalue the yuan should work to further support the recent technical reversal from oversold territory. The landscape of the dollar and the importance of the yuan was our number one Tradable Event this Week.
Technicals: Gold achieved a solid technical reversal late last week, but the bounce is seeming to stall at first key resistance at ...
