Cautious Bullish Equities. Crude Battles Back. Gold Firm, USD Slides

10/16/2018 10:08 am EST


Bill Baruch

President and Founder, Blue Line Futures

Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, Forex and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on and short Midday Markets video.

Bill Baruch’s FX Rundown for Oct. 15-16 here.

Bill Baruch’s Midday Market Minute short video for Oct. 16 here.
Stocks surge higher Tuesday, S&P and Treasuries.


E-mini S&P (December)

Monday’s close: Settled at 2349.00, down 19.50.

Fundamentals: U.S. benchmarks are stable this morning, moving higher from Monday’s late session pullback. Strong overhead technical resistance combined with news discovering the “accidental death” of Saudi journalist Jamal Khashoggi during a “botched interrogation” quickly dampened sentiment ahead of the close. Secretary of Stare Pompeo arrived in Saudi Arabia this morning and traders must keep an ear to the ground for further developments.

Earnings season kicks into high gear today with Goldman Sachs, Morgan Stanley, Johnson & Johnson (JNJ), United Health (UNH), Blackrock (BLK) and more. Also, Netflix will be the first of the FAANG stocks to report after the bell.

They will be accompanied by IBM (IBM), United Continental Holdings (UAL) and others.

The Banking ETF (XLF) lost 0.42% Monday. Despite solid earnings from Bank of America (BAC) the trend continues with a lower close Monday. Today will certainly be put to the test; Goldman Sachs (GS) (+1%) and Morgan Stanley (MS) (+2.8%) are both higher after beating this morning, but can they hold these gains through the close. As we pointed to Monday, 27.21 is a big level that XLF must close above in order to show stability. Lastly, we cannot express enough the emphasis that will be put on Netflix (NFLX) after Q2 results posted a large miss.

Technicals: The tape is consolidating and building the third consecutive inside session. Ultimately, this is creating a pennant formation which leads to a directional move. We remain cautiously Bullish in Bias and expect higher prices over the intermediate-term. The hurdle since Friday afternoon seems to be holding above the December 200-day moving average. This level aligned with the continuous 200-day remains our pivot. While this hurdle is real, we maintain that we must see a close above ...

Today’s economic calendar

Industrial Production and Manufacturing Production are out.

JOLTs Job Openings report is out.

TIC data is out 4:00 pm EDT and newly appointed San Francisco Fed President Daly speaks in the afernoon, she is a voting member in December


Crude Oil (November)

Monday’s close: Settled at 71.78, up 0.44

Fundamentals: Crude Oil is lower this morning but battling at the $71 mark. Expectations are calling for inventories to be added last week and this coupled with what is perceived to be a cooling of tensions between the U.S and Saudi Arabia over the assumed death of the journalist has Crude arguably on its back foot. First, API is due after the bell and analyst expectations will trickle out as the day develops. For now, we are seeing an expected build of about 1 mb of Crude although both products are seen to have drawn down about 1 mb each. Secretary of State Pompeo arrived in Saudi Arabia this morning and developments on this front will be crucial. Reports late Monday said Saudi Arabia will admit to the death of the journalist at the consulate during a “botched interrogation”.

Technicals: Price action is holding ground with a higher low for the third session since trading to 70.51 on Thursday. Sunday’s spike higher quickly dissipated as it fell shy of a brick wall of major three-star resistance at ... 


Gold (December)

Monday’s close: Settled at 1230.3, up 8.3.

Fundamentals: Gold holding firm in a very constructive manner. The U.S dollar (USD) continues to trend lower against major currencies, however, the last component remains the Chinese yuan (CNY) which is gaining slightly lower but remains near the August lows. Geopolitical uncertainties have been relevant all year, however, the dollar has benefited much of the time. With the Dollar losing ground on the week, if relations between Saudi Arabia and the U.S deteriorate at all, Gold is in a prime position to benefit. Industrial Production came in better this morning and JOLTs Job Openings is out.

Technicals: Gold is putting together a nice but overdue recovery. The shorts have begun to cover but even at this level, we imagine there is still a formidable tailwind that could develop from such. Our near to intermediate-term upside target of ... 

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

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

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