Markets rally overnight notes Bill Baruch, President of BlueLineFutures.com, who provides technical levels for major markets here.

E-mini S&P (ESM)

Last week’s close: Settled at 2837.75, up 16.75 up Friday and 27.00 on the week

Fundamentals: U.S benchmarks and those from around the world are off to a strong start after data from China was better than expected over the weekend. We are certainly not calling it robust, but both reads on March Manufacturing PMI broke a three-month streak of contractions and came in at the highest level in half a year at 50.5 and 50.8, expectations flirted with a fourth contraction. March Manufacturing data from the UK this morning added a healthy surprise coming in at 55.5 versus 51.2 expected although the March German read was revised slightly worse to 44.1. Remember, 50.0 defines the line of contraction and expansion.

Our narrative from last week remains the same, equity markets are likely to perform positively on good economic data and negatively on poor data. Now that the Federal Reserve confirmed their willingness to be dovish and the odds through yearend favor a rate cut rather than rates staying unchanged, the markets again find themselves in a state of accommodation and we must see better data from an extended period of time in order to reinvigorate tightening projections. This was confirmed by Friday’s PCE Index. The Fed’s preferred inflation indicator was soft at 1.8%, matching the lowest level in a year. Personal Spending and Income data also fell below expectations. This morning Eurozone CPI also came in below expectations and overall soft inflation around the globe will allow central banks to remain as patient and as accommodative as they’d like.

We look to two crucial data points; February Retail Sales at 7:30 am CT and ISM Manufacturing at 9:00 am CT. A bounce back in January Retail Sales largely drowned out worse revisions for the abysmal December read. U.S Manufacturing is showing its worse inconsistencies since 2015, which led to contractions in December through February 2016 and a stock market correction. The ante has been upped for today’s data.

A combination of narratives brought a tailwind to equity markets to close out the quarter. One being the quarter-end in and of itself. Another being the ongoing U.S.-China trade talks. Discussions wrapped up in Beijing Friday with U.S. Treasury Secretary Mnuchin providing his rubber stamp. Chinese Vice Premier Liu He travels to Washington today to continue these talks and markets have held a path of least resistance higher during and immediately after such. There is a budding belief that the two sides are getting very close to a deal, however, a failure to find substance this week could quickly leave markets disappointed.

Technicals: Price action is firmly higher this morning after both the S&P 500 and Nasdaq 100 gapped higher on the open last night. Both indices settled Friday at resistance and now these levels bring major three-star support additionally as a gap. The S&P traded to an overnight high of 2861.25 and will remain bullish above 2851.75. Major three-star resistance comes in at the recent swing high and then again above there at 2878.50, the high from January 2018. For the NQ, we had major three-star resistance last week at 7442-7447.50. Price action is out above there now and this will act as our pivot today; the tape is immediate term bullish above here and must confirm such on a closing basis.

Bias: Neutral

Resistance: 2858.75-2861.25*, 2866***, 2878.50***

Pivot: 2851.75

Support: 2837.75-2840.75***, 2827.75-2831.25**

NQ (NQM)

Resistance: 7534-7544.75**, 7664.75**, 7728.75***

Pivot: 7442-7447.50***

Support: 7400.50-7414.50***, 7372.50**, 7352***, 7276-7290***

Crude Oil (CLK)

Last week’s close: Settled at $60.14, up 0.84 on Friday and 1.10 on the week

Fundamentals: WTI Crude Oil is up 1% this morning but outpaced by Brent. The surge comes on the heels of better than the recessionary-forecasted China Manufacturing data followed up by a strong read from the UK. Price action finished last week on an overall strong note but did retreat from session highs after Baker Hughes reported the sixth straight weekly drop in rigs. At 816, Oil rigs are at the lowest level in a year which has certainly supported prices amidst estimated record production from the United States. Additionally, the landscape remains upbeat with this being a seasonally bullish time of year, Saudi Arabia leading OPEC’s drive to lower supply, a positive rhetoric around U.S-China trade and now upbeat economic reads. Still, U.S ISM Manufacturing is in the crosshairs at 9:00 am CT.

Technicals: Price action could not confirm what we defined as a breakout on Friday; a close above the previous swing high of $60.39. Furthermore, it could not confirm a breakout above the May 200-day moving average that comes in at $60.75 today. We must be transparent that Friday’s close technically reduced our Bullish Bias just a bit, however, the upbeat fundamental news coming out of the weekend has kept us excited about higher prices and although Friday’s high fell just shy of the 200-day moving average we will give this narrative another shot today.

Bias: Bullish/Neutral

Resistance: 60.75**, 61.28**, 61.66**, 62.56***

Pivot: 60.39***

Support: 60.13-60.14**, 59.30-59.63**, 57.88-58.26***

Gold (GCM)

Last week’s close: Settled at $1,298.5, up 3.2

Fundamentals: Gold gained early ground on Friday after U.S PCE, the Fed’s preferred inflation indicator, was soft. However, this price action quickly dissipated amidst a heavy tape carrying over from Thursday and a strong quarter-end for equity markets. The U.S. Dollar Index has gained 1.5% since the Federal Reserve meeting low on March 20, but weakening Treasury yields helped offset such for gold. Thursday’s spike in the dollar was too much for Gold and now although the Dollar has weakened marginally, better than the recessionary-feared Manufacturing data from China has lifted sovereign debt yields around the world. Overall, the near-term landscape for Gold is becoming a bit more questionable and Friday’s failure to hold $1300 is not favorable.

Technicals: Gold failed at major three-star resistance at $1,306.4 on Friday after spiking to a high of $1,304.6. Additionally, the metal failed to settle above $1,299. The tape is very unenthusiastic, and we find it a high-risk that price action tests deep into our wide-range of major three-star support at $1,280.8-$1,287.5; for this reason, we are now outright neutral. There are many technical indicators that align at this support; previous lows in the April, higher lows in the June, a trend line on the continuous among others. It is important to understand that a move below here is bearish.

Bias: Neutral

Resistance: 1306.4***, 1311*, 1315.7-1316.9***

Pivot: 1299

Support: 1280.8-1287.5***

Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com