Major markets are waiting on the monthly jobs report notes Bill Baruch, President of BlueLineFutures.com.

E-mini S&P (ESM)

Yesterday’s close: Settled at 2917.50, down 5.50

Fundamentals: U.S benchmarks have firmed overnight ahead of the pivotal nonfarm payroll report at 7:30 am CT. It’s common that a Fed meeting immediately preceding the jobs number can take the air out of the report. That is certainly not the case today after the Fed strongly emphasized their data dependence and tried their best to do nothing at all Wednesday. As of this morning, the odds the Fed will leaves rates unchanged in 2019 have climbed above 50%, meaning the odds do not favor a rate cut in 2019 anymore. Today’s report is expected to sway sentiment one way or the other.

Wage growth is still the most important component and average hourly earnings are expected to grow at a pace of 0.3%. Job growth has taken a back seat since the onset of 2018, but the argument remains there is still slack; 181,000 jobs are expected to have been added in April. An overall strong report will invigorate the Fed’s neutrality at best and this could pressure equities just as we saw on Wednesday after Fed Chair Powell called slow inflation transitory.

Jobs are front and center but not the only piece of information we as traders and investors get to dissect ahead of the weekend. Eurozone CPI squeaked out a beat earlier this morning, still, the dollar is green. ISM Non-Manufacturing is due at 9:00 am CT. Next, there is a deluge of Fed speak to help digest everything from the week. Chicago Fed President Evans speaks at 9:15 am CT, Fed Governor Clarida at 10:30 am CT, NY Fed President Williams at 12:45 pm CT and Fed Governor Bowman speaks at 2:00 pm CT; all are 2019 voting members.

Technicals: We took a slight bearish bias from post-Fed meeting Wednesday into yesterday. Price action in each the S&P and NQ sliced through major three-star supports at 2912.50-2917.25 and 7728.75-7755.50 but with a long list of supports below and ahead of the job number, a minor pullback never came close to a panic. Price action in each settled right at those crucial levels and this is as neutral as it gets ahead of a fundamentally impacted session today. The higher tape from the overnight now leaves gaps at yesterday’s settlement which aligns with the important area of support. Gaps like to get filled; traders can look to trade against (buy) the first test against the gap.

Crude Oil (CLM)

Yesterday’s close: Settled at $61.81, down 1.79

Fundamentals: Crude oil took a beating yesterday, but it certainly has not been the only commodity dog this week. Yes, energies have given up last week’s failed breakout, but the majority of the metals complex has been suffering since February and copper puked up more than 10¢ or nearly 4% this week and 7% from its high two weeks ago. Given the tremendous focus on Iran sanctions/waivers, it is easy to forget that Chinese Manufacturing data whiffed on Monday night. Remember, last month, market participants were excited for the first expansion since October and only the second beat since August, but the number slipped back to 50.1 hindering the argument that global growth has been bottoming. It was already known that German Manufacturing slipped the hardest since 2012 but the final ready worsened a bit yesterday morning. We have been upbeat crude oil since February and as we said yesterday, we are firmly neutral as we wait and see how the week closes. We remind you all of this as estimated U.S production hit a record of 12.3 million barrels last week because it’s easy to get stuck in the forest (Iran) and miss the trees.

Technicals: Price action found and held the 200-day moving average yesterday. Crude has been on a one-way ticket north all year and the uptrend is still, generally, very strong.

Gold (GCM)

Yesterday’s close: Settled at $1,272, down 12.2

Fundamentals: Gold is teetering at support, discussed in more detail below. Today’s jobs number will be make or break for the metal. Wage growth is most important component and Average Hourly Earnings is expected to come in at +0.3% but do not underestimate the importance of job gains expected to come in at 181,000. Nonfarm payroll is front and center but not the only piece of information to help understand gold’s path ahead of the weekend. Eurozone CPI squeaked out a beat earlier this morning, still, the dollar is green. ISM Non-Manufacturing is due at 9:00 am CT. Next, there is a deluge of Fed speak to help digest everything from the week

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