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)

Thursday’s close: Settled at 2734.50, up 36.00.

Fundamentals: U.S. benchmarks recovered strongly from early lows Thursday finding a tailwind from trade headlines. That strength has dissipated into this morning, but one thing remains, a very technically driven landscape; more detail in the Technical section below.

With the market ping-ponging between major three-star support and then resistance by noon EDT before slipping back below 2700, it was reported by the Financial Times that U.S. Trade Representative Lighthizer told industry executives that the next round of tariffs on China, set for January, was on hold as talks between the two sides were reopened.

Stocks ripped higher on the news and ultimately wanted to go higher after achieving a strong support level below 2700. We say this because Commerce Secretary Ross denied the January tariffs being on hold and furthermore, Lighthizer denied saying such.

Still, the S&P (SPX) finished at the high of the session but has failed to trade above Thursday’s settlement in the overnight; a crucial component to today’s path, discussed in the Technical section below.
The market now finds itself on soft footing. What was a euphoria around trade has turned to a dead cat bounce of sentiment. Although President Trump and President Xi are meeting at the end of the month, expectations are slim.

Tech giants Amazon (AMZN) and Apple (AAPL) are each down about 1% this morning. Furthermore, chipmakers are weighing tremendously on sentiment, NVDIA (NVDA) is down 17% on weak forecasts.

On the brighter side, we might be seeing the first signs of the Federal Reserve backing away from their hawkish rhetoric. Fed Chair Powell had pointed to global headwinds dampening strong U.S. growth and Atlanta Fed President Bostic discussed a neutral rate between 2.5 and 3.5%; the low end of which means only one more hike.

Today’s calendar brings Industrial Production and Chicago Fed President Evans, a voting member next year.

Technicals: Patience and dependence on the technicals certainly paid off through Thursday’s volatility whether you were playing from the long side, short side or both. Ultimately, major three-star resistance at ...

 

Crude Oil (January)

Thursday’s close: Settled at 56.68, up 0.24.

Fundamentals: Thursday was another disappointing session to the thesis that Crude Oil is oversold and due for a post-options settlement and contract-roll rally. Holding back price action was certainly another very bearish EIA inventory report, they posted the eighth build in a row and the largest of the streak.

Furthermore, the lower 48 states added another 100,000 bpd in production. Interesting enough though, such a bearish report did not pummel the market into another oblivion. Although Crude has traded constructively following such, the tape has remained contained at a crucial resistance level.

The picture has turned more positive this morning with Russia’s Putin saying they are willing to oblige to OPEC and non-OPEC production cuts and as number point to strong consumption in China.

dditionally, reports point to a budding angst within U.S. and Saudi relations. Saudi Arabia feels hung out to dry after their efforts to aid President Trump by increasing production in the wake of the Iran sanctions, adding that there was no indication that such waivers on sanction were coming down the pipeline.

The entire picture turned murky after the killing of Saudi journalist Khashoggi and the relationship has been tainted since. Overall, we hold the belief that Crude Oil is undervalued here, and we expect price action to retest $60 in the near future.

Technicals: Crude is pulling higher from overnight lows but faces headwinds at first key resistance at ... 

 

Gold (December)

Thursday’s close: Settled at 1215, up 4.9.

Fundamentals: The Dollar Index (DXY) is trading 1% from its high on the week and the Chinese yuan (CNY) has also been constructive against the U.S. dollar (USD). Overall, an uptick in geopolitical uncertainties from Brexit and Italy to trade coupled with the first signs of the Federal Reserve showing some concern for future U.S. growth has lifted Gold this week.

Remember, this is a seasonally softer time of year and while we are upbeat on Gold, the true buy may not come until after the December 19 FOMC meeting. Until then, we like to take a nimbler path as we trust the technicals.

Today’s calendar brings Industrial Production and Chicago Fed President Evans, a voting member next year.

Technicals: Notching a very constructive session Thursday and trading higher into this morning, Gold has an upbeat landscape and we remain overall Bullish in Bias. The metal is eyeing our second key level at ... 

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

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