Major Market Support & Resistance Levels for Week of July 12

Big week for earnings as Bill Baruch breaks down the fundamentals and technicals for stocks, crude oil and gold.

E-mini S&P (ESU)

Last week’s close: S&P 500 settled at 3178.50, up 37.50 on Friday and up 49.50 on the week; NQ, settled at 10,837.25, up 109.75 on Friday and up 481.50 on the week

Fundamentals: U.S. benchmarks opened higher last night and are finding favorable tailwinds ahead of the bell. New York reported no new Covid-19 cases for the first time since the onset of the pandemic. Reuters reported this morning Pfizer Inc. (PFE) and BioNTech (BNTX) were granted FDA “Fast-Track Designation” for two Covid-19 vaccine candidates. The news helped push stock indices broadly out above their overnight ranges. PepsiCo Inc. (PEP) kicked off earnings ahead of the bell and topped expectations. We expect guidance from companies to be thin and PepsiCo failed to update its outlook but noted strong demand as consumers stock their pantries amid lockdowns. The banks step to the plate tomorrow with JPMorgan (JPM), Citi (C) and Wells Fargo (WFFC) all reporting. Their loan loss provisions will be under the microscope as a barometer of expectations for defaults.

Monday’s economic calendar was quiet. Things pick up Tuesday though with GDP and Production data from the U.K., ZEW Sentiment from Germany, Eurozone Industrial Production and U.S. CPI all on the radar. Wednesday evening brings a deluge of data from China.

Technicals: We continue to hold our cautiously bullish as the path of least resistance remains higher. However, as always, we are not recommending chasing price action and instead pick your spots. The S&P 500 is running into major three-star resistance at 3212.75-3216.75 while the NQ faces the round 11,000 mark. Our rising momentum indicator in the S&P 500 is trailing the spike and aligns with previous resistance and Friday’s settlement as major three-star support at 3170.75-3178.50 this morning. First key support comes in at 3186.75-3189. The NQ continues its melt-up and achieved major three-star resistance at 10,960-11,000. The tape remains immediately bullish while out above 10,825-10,863.75 a level that aligns our rising momentum indicator with previous support and Friday’s settlement.

Bias: Neutral/Bullish
Resistance: 3212.75-3216.75***, 3258.75**, 3312**, 3339.50****
Support: 3186.75-3189**, 3170.75-3178.50***, 3152.25-3154**, 3126-3129**, 3115.75-3118**, 3103-3107***

NQ (September)
Resistance: 10,960-11,000***, 11,330***, 11700***, 12,897.25****
Support: 10,825-10,863.75***, 10,664.50-10,694.50**, 10,625**, 10,560**, 10,513-10,525.75***

Crude Oil (CLQ)

Last week’s close: Settled at $40.55, up 93¢ on Friday and down 10¢ on the week

Fundamentals: Crude oil is off Friday’s snap back highs as Wednesday’s meeting among the OPEC+ Monitoring Committee comes in to focus. They are expected to consider and potentially announce a taper of the pandemic cuts from 9.7 million barrels-per-day (bpd) to 7.7 million bpd. Russia has been vocal about bringing production back online. The trend is clearly higher, but the gap from March 6 has contained the rally just as ongoing demand comes under question. The IEA revised higher its demand expectations for 2020 but noted last week the surge in Covid-19 cases as the greatest risk to the demand recovery. We also find the potential of rising U.S. production amid more favorable hedging conditions as another clear risk to the rally. Considering all, we would focus on pullbacks to be a buying opportunity.

Technicals: Price action on Friday regained the $39.60 level quickly and extended gains to a high of $40.77. It has since been contained by resistance at $40.80. The short-lived nature of Friday’s weakness has buoyed our momentum indicator, today’s pivot, the tape is favorable while holding out above here. Still, we see limited upside at these levels and would prefer to be buyer at $36.59 to $36.96.

Bias: Neutral
Resistance: 40.80**, 41.28***, 41.63**, 42.33****
Pivot: 40.02
Support: 39.60-39.85***, 38.20-38.49**, 37.50*, 36.59-36.96***

Gold (GCQ)

Yesterday’s close: Settled at $1,801.9, down $1.90

Fundamentals: Gold is trading higher to start the week. Friday’s pullback was constructive and held a test to previous swing highs. Strength across the metals complex is bringing favorable tailwinds as copper extends its melt-up and silver chews through previous technical resistance. U.S. Dollar weakness is aiding such tailwinds. However, traders should keep a close eye on the rise in rates over since early Friday morning and this coupled with such a melt-up in risk assets pose the greatest foreseeable risk to the Gold rally. Today’s economic calendar is quiet, but boasts speeches from NY Fed President Williams at 10:30 am CT and Dallas Fed President Kaplan at noon CT.

Technicals: We have been outright Bullish in Bias Gold and continue to be such. Friday’s pullback battled at 1803.8-1804.4 but ultimately held 1790-1794.8 constructive and today’s response is creating a bull-flag pattern that we believe paves a path of least resistance to 1849.1. Price action is bullish across all time frames while out above $1,807.70. Silver has chewed through its trend line resistance from July 2016 and this is bringing a much-needed tailwind to gold given silver’s lag.

Bias: Bullish
Resistance: 1820**, 1828.5***, 1849.1***
Pivot: 1807.7-1809.3
Support: 1803.8-1804.4***, 1790-1794.8***, 1775.6-1781** 

Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com. Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day. Email us at info@bluelinefutures.com to start the conversation and set up a phone call with our experts.