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 MoneyShow.com and short Midday Markets video.

E-mini S&P (December)

Yesterday’s close: Settled at 2727.50, down 0.25.

Fundamentals: U.S. benchmarks are near unchanged in what has not been a quiet session. The trend this week has been lower and after the S&P (SPX) pared an early gain of 1% and failed against our first key resistance yesterday, it settled essentially unchanged at 2727.50.

However, the reopen saw a surge of 0.5% on news that the White House will hold off on imposing tariffs on foreign automobiles ahead of a report by the Commerce Department on national security implications. The gains dissipated into Asian hours despite stronger than expected Industrial Production and Fixed Asset Investment from China.

The S&P then traded to a new low of 2711 following the European open. The currency picture is stable with a Brexit deal drafted and what has been perceived as a soft reaction to Italy’s populist government rejecting the European Commission’s demands to revise their budget. Ultimately, the reaction is muted as we await news on whether UK Prime Minister May can sell the deal and whether the Commission will begin disciplinary action on Italy. Furthermore, traders anticipate a crucial read on U.S CPI. Expectations are for the closely watched Core number that excludes food and energy to come in at the typical +0.2% MoM and +2.2% YoY.

Last week, PPI was hot due to the international trade conflict and this coupled with a hawkish Federal Reserve has markets on edge. A stronger than expected number today will support the Fed’s tone and lift the U.S. dollar and Treasury yields while pressuring equity markets lower. However, a softer than expected number this morning will likely boost stocks, commodities and Treasury prices. AFed Governor Quarles begins his two-day semi-annual Congressional testimony on banking and this evening all eyes will be on Fed Chair Powell who speaks at 5:00 pm EDT.

On the earnings front, Macy’s (M) headlines the premarket list and Cisco Systems leads after the bell. Tomorrow we look to the world’s largest retailer in Walmart (WMT) along with Retail Sales data.
Technicals: We have had a minor Bearish Bias all week and provided a line in the sand in which to stay short. Yesterday’s rally failed right at first key resistance and again closed below our battleground level of 2735.75-2739.75 which we said leaves the bears in the driver’s seat. The overnight price action is extremely interesting for two reasons; it was ...

 

Crude Oil (December)

Yesterday’s close: Settled at 55.69, down 4.24.

Fundamentals: Yesterday, the bottom fell out of Crude Oil in what appears to be its worst single day in three years. Domestic inventory builds, waivers on Iran imports and tweets from President Trump have been a combined knockout punch for the bull market after closing below 57.48 and trading to the lowest level in more than a year.

The market is attempting to find footing from extremely oversold levels and on reports that the OPEC and non-OPEC alliance is discussing a production cut of 1.4 mbpd for 2019. This would be an increased cut from the already known 1 mbpd.

Crude attempted a rally on Monday, but President Trump jabbed a tweet at OPEC and gains quickly dissipated. Truly, the largest factor at play today is the December options expiration which we will discuss in the Technical section below.

Technicals: Yesterday, was the twelfth straight and largest losing session for Crude. Furthermore, after four days of large volume, yesterday was the most volume since June; this spells capitulation. While all of this screams a shift of sentiment, the most important thing to note is ... 

 

Gold (December)

Yesterday’s close: Settled at 1201.4, down 2.1.

Fundamentals: Gold is trading at unchanged this morning as the dollar is overall stable. Today’s landscape will be crucial for the metal. Things started off with CPI which was largely in line with expectations, however, the Core YoY read missed the mark for the third straight month. The MoM number was in line, breaking a streak of two straight misses relative to expectations. This should buoy Gold and allow it to move higher from a level of technical support. The currency component remains fickle as we await further news on Brexit, Italy and trade. Today Fed Governor Quarles begins his two-day semi-annual Congressional testimony on banking. At 5:00 pm EDT, all eyes must be on Fed Chair Powell who speaks.

Technicals: Gold is holding ground and testing ... 

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

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