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. 20 here.
Stocks grind higher Thursday. Banks doing well today. Tech leading higher. Crude retreats, buying opportunity, USD lower.
E-mini S&P (December)
Wednesday’s close: Settled at 2915, up 3.25.
Fundamentals: U.S benchmarks are stable to higher this morning and the S&P (SPX) and Dow (DJI) are holding onto gains yesterday that were led by the banks and energies. JP Morgan (JPM), Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) all had monster sessions with gains of more than 2.5% as the 10-year Treasury note yield reached the highest level since May and the 2-year yield the highest since 2008.
The NQ (IXIC) pared early losses as tech finished mixed on the session. However, it was the Russell 2000 (RUT) that we were watching most closely. The small-cap index can be the first to crack in a leadership manner and although it finished almost 1% from the session high, it failed to trigger selling below a crucial near-term support level that we discussed on the Midday Market Minute.
The paradox this morning is that sellers are showing signs of exhaustion. Europe and Asia are both in the green and hopes of fresh stimulus from China to offset the U.S tariffs coupled with reduced tariffs for other countries at the Chinese border have provided a tailwind.
Technicals: Price action is grinding higher in what almost feels like a melt-up or sellers strike. We have our rare major four-star resistance level at ...
Today’s economic calendar
Philadelphia Fed Manufacturing.
Tomorrow morning brings the highlight of the data this week with flash PMIs.
Crude Oil (November)
Wednesday’s close: Settled at 70.77, up 1.18.
Fundamentals: Wednesday’s EIA inventory report was supportive to prices although not outright bullish. Importantly, Cushing drew inventories down for the second week in a row as the market pokes its head out of a seasonally weaker time of year. The path of least resistance has been higher for some time now, but the immediacy of such was heightened this week after Saudi Arabia said they are comfortable with Brent above $80. Though this statement on the surface should appear insignificant since Brent has been at or within 1.5% of $80 in every session over the last week, we took this as conceding the fact they cannot add the necessary production to keep prices from going above $80.
WTI traded to a high of 71.35 this morning, the highest level for the November contract since December 2014. This came ahead of a meeting among OPEC members this weekend. Sources reported this morning that members said it is unlikely that they agree to raise production at this meeting. Immediately after this was reported, President Trump took to Twitter saying that the U.S protects the Middle East and he does not take kindly to them pushing Oil prices higher and higher, they must get prices down. Crude has pared its gains since this comment back to unchanged on the session.
Technicals: We have been, and we remain Bullish in Bias. However, it is important to understand that there is a layer of major three-star resistance at ...
Gold (December)
Wednesday’s close: Settled at 1208.3.
Fundamentals: A weaker U.S. dollar (USD) this morning is supporting Gold and overall metals prices. We remain firm believers that Gold is underpriced near the $1200 mark, but we must see Currencies bring a tailwind instead of acting as a constant headwind.
The Dollar Index (DXY) has broken below the key level we designated here yesterday at 94; positive sentiment around Brexit (despite no substance), supportive comments from Bundesbank President Weidmann today and strong data from the U.K this week have all brought a helping hand. Additionally, the Chinese yuan (CNY) has continued to strengthen a bit since officials said they have no plans to devalue the yuan further.
Fresh stimulus hopes from China have also supportive the metals sector with Palladium leading the way. We must see the dollar/yuan close below support at 6.824 to garner technical selling (meaning a strengthening yuan). Philly Fed Manufacturing and weekly Jobless Claims both beat this morning and have momentarily stopped the bleeding in the dollar but technically the selling could have just begun as it has now broken below support.
Technicals: Price action secured a close above the 1204 pivot yesterday which was crucial, however, technical resistance at the ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
