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 and short Midday Markets video.
Bill Baruch’s Midday Market Minute August 28 short video here.
Stocks retreat off of record highs while gold consolidates to $1204
Bill Baruch’s Forex Rundown August 27. Euro on a tear. Yen stable. Yuan gains. China boosts Aussie. Bullish CAD.
Bill Baruch’s Tradable Events this week: NAFTA Mexico, yuan, bullish gold, metals.
E-mini S&P (September)
Monday ’s close: Settled at 2898.50, up 21.75.
Fundamentals: The S&P (SPX), NQ and Russell 2000 (RUT) all traded and closed at record highs Monday. There are three immediate-term tailwinds; the U.S and Mexico trade deal, an accommodative Federal Reserve and U.S and Europe/China trade relations, yes this is not a typo.
Monday, the newly reached deal between the U.S and its third largest trade partner, Mexico, was the White House’s first major international trade deal to break deadlock and it sheds a light at the end of the tunnel. The jubilation can certainly power equity markets higher, particularly so after the Federal Reserve has set a clear tone that they will not disrupt the economic recovery by raising rates too quickly.
This paves the way for Canada to come back to the table and once the buy the news push settles in, it will be critical to see how eager the second largest trade partner to the U.S is to make a deal. In the midst of Monday ’s news with Mexico, President Trump again poured cold water over potential headway with China, saying “it’s just not the right time.”
At this point, we are sure we sound like a broken record, but from an equity markets and trading perspective, the only thing that mattered in the talks between the U.S and China last week was that there appeared to be a delay in imposing $200 billion in tariffs on Chinese goods in September and this is seemingly achieved.
On Monday, German Business Climate data beat expectations. This comes on the heels of President Trump’s meeting with EU Commission President Juncker and reports that the U.S is trying to speed up talks in reaching an understanding on trade.
Technicals: The S&P quickly chewed through record highs Monday and overnight achieved the next century mark. Three of four major U.S benchmarks are in unchartered territory and our next target in the S&P is 2924.50. We are outright Bullish in Bias as this is a textbook breakout but now we must judge if the market is becoming exhausted. To do so, we want to ...
Today’s economic calendar
The Conference Board Consumer Confidence Index increased in August.
Wholesale Inventories spiked 0.7% in July.
US Census International Trade in Goods and Services: June exports of industrial supplies and materials ($46.3 billion) were the highest on record.
S&P CoreLogic Case-Shiller Home Price Index is 213.7, up 0.51%.
Richmond Fed Survey of Manufacturing expanded in August, rising from 20 in July to 24 in August.
Dallas Fed Texas Manufacturing Outlook: production index held steady in August at 29.3.
Crude Oil (October)
Monday ’s close: Settled at 68.87, up 0.15.
Fundamentals: Crude Oil is holding strong near the highest level since late July. A weaker U.S. dollar (USD), stronger Chinese yuan (CNY), continued compliance from OPEC and Non-OPEC and Genscape numbers showing a draw at Cushing have all kept prices elevated. The safe-have ascent in the dollar has dissipated and the Dollar Index (DXY) finds itself below technical support and at the lowest level in nearly a month.
China has begun stabilizing the yuan, a trend that if it continues will bring great support to commodities across the board. OPEC and non-OPEC members had a call Monday and continued to promise to curb production cuts. However, weaker production from Venezuela, slipping purchases of Iranian Crude out of Europe as sanctions near and Saudi Arabia failing to follow through with production promises have all brought a supportive hand, offsetting this rhetoric.
Inventory data begin to steal headlines as today develops with the private API survey after the bell and tomorrow’s official EIA read.
Technicals: The Crude Oil chart continues to be a very constructive one as prices remain above major three-star support at ...
Gold (December)
Monday ’s close: Settled at 1216, up 2.7.
Fundamentals: The dollar is weaker, the yuan is stronger, and Gold nudged a new swing high above 1220. The currency trade has allowed Gold the opportunity to recover but we have not even begun to see a squeezing of shorts in the metal.
Today, the currency aspect finds itself at a very critical juncture on a technical basis; the dollar is moving below support across the board and this could easily encourage at least a 1% follow through in both the euro (EUR) and the yuan. This comes as the safe-have premium comes out of the dollar and this can also be seen with Treasury prices bleeding lower. This will prove to be a bit of a tug-of-war with rates now that Gold has regained ground. Still, the most important aspect for now is the dollar. Goods Trade Balance and Wholesale Inventories both missed this morning, and this should weigh on the dollar. Case Shiller Housing Index is out and most importantly Consumer Confidence is out.
Technicals: We remain Bullish in Bias Gold but have begun to Neutralize our emphasis just a bit after such a firm move higher. We noted in both the Midday Market Minute and FX Rundown Monday that traders must capitalize on this rip higher after pressing positions early Friday. Still, first key resistance comes in at ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
