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 short video for Sept. 7 here.
Stocks are choppy on the back of a strong jobs report.

Bill Baruch's FX Rundown short video for Sept. 6-7 here.

What to know ahead of Nonfarm Payroll. This big read at 8:30 am EDT Friday is going to impact the dollar, euro, Japanese yen, Aussie and Canadian. We run down the levels to trade. 

 

E-mini S&P (September)

This portion was released at 8:00 am EDT, prior to Nonfarm Payroll.

Thursday’s close: Settled at 2879, down 9.25.

Fundamentals: It has been a rough week for the tech sector as the NQ is more than 3% from Tuesday’s near record-setting session.

Thursday, Bill Baruch discussed the landscape for tech in two interviews for CNBC’s Trading Nation; the first focused on Facebook and Twitter, the second focused on the chip sector (click the link to watch the videos).

The larger picture for U.S stocks isn’t so bad; the S&P is down 1% on the week and the Dow is less than 1% off last week’s swing high. Thursday’s midnight deadline for President Trump to address the $200 billion worth of tariffs on China, the third wave and official start of a trade war, has come and gone.

Without any word on implementation, the same uncertainties we had heading into this week persist. This morning though, the focus shifts to jobs and Nonfarm Payroll out. This is good news for the broader market; we believe the Federal Reserve is in the driver’s seat and if wage growth continues to show only gradual growth, there is no reason for the Fed to tighten policy faster.

Today's Nonfarm Payroll report: In August, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the year, average hourly earnings have increased by 77 cents, or 2.9 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.73 in August.

Average Hourly Earnings are expected to grow at 0.3%, annualized at 2.7%. A hot number above 0.3% combined with the tariff cliffhanger would be cause for real concern. However, if Average Hourly Earnings comes in below 0.3% and job growth remains at what we have called par, this market is a Buy and traders must trust the technical levels discussed below.

Technicals: We Neutralized our near-term Bias last week after we called our target of 2924.50 essentially achieved. We have exuded caution and patience since then calling for a test to our major three-star support at ...

 

Today’s economic calendar

Boston Fed President Rosengren speaks at 8:30 am EDT.

Cleveland Fed President Mester speaks at 9:00 am EDT.

Dallas Fed President Kaplan is at 12:45 pm EDT.

Traders should keep an ear to the ground for any comments on today’s payroll numbers.

 

Crude Oil (October)

The below portion was released at 9:00 am EDT, after Nonfarm Payroll.

Thursday’s close: Settled at 67.77, down 0.95.

Fundamentals: Crude Oil has traded as much as 6% from the holiday session hurricane-heightened fear high.

The tape is attempting to stabilize into this morning and ahead of the weekend, but it has failed to regain what was a crucial level of support which now comes in as resistance (discussed in the Technical section below).

Thursday’s EIA inventory report was not bullish despite the much larger than expected headline draw of 4.302 mb when -1.294 mb was expected. This was more than offset by builds in the products totaling 4.964 mb.

Additionally, estimated production in the lower 48 states rose 100,000 bpd. While nothing major has shifted in the more intermediate to longer-term fundamental landscape, we have tread more cautiously since our near-term upside target of $70.40 was hit last week. There is now near-term technical damage that must be repaired, however, fundamentally we still believe Crude Oil is on a path to $80 this year.

Technicals: We remain adamant that Tuesday’s tail cannot go unnoticed. While we do trust our technicals, price action shred through major three-star support at 68.10-68.53 Thursday and the chart incurred further damage. Today’s price action and weekly settlement will be important. First key support is at ... 

 

Gold (December)

Thursday’s close: Settled at 1204.3, up 3.0.

Fundamentals: Gold is battling at the 1200 mark this morning after Nonfarm Payroll beat expectations. Most importantly, Average Hourly Earnings came in hot at +0.4% MoM, annualized at 2.9%. Additionally, 201,000 jobs were added in August. The data has been very good recently when considering ISM as well.

Gold was very undervalued at 1200 when the data was not there. While we still find Gold undervalued at 1200, the data is making its case but that does not mean there is a case for Gold to sustain itself below 1200.

Boston Fed President Rosengren said this morning that the U.S. is not well positioned if another recession hits. He added that the Fed should continue gradual rate rises as the economy grows. He’s essentially, implying that they must stay the course in order to have dry powder to respond to the next recession.

We await what Fed members Mester 9:00 am EDT and Kaplan at 12:45 pm EDT.

Technicals: Gold is holding ground very well at 1200 this morning considering the fundamental news. This is a great sign and signals that Gold has already incurred the worst of the selling. We must see a close above ... 

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View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.

Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.