Bill Baruch provides key technical levels for major markets this week.
E-mini S&P (ESU) & Nasdaq 100 (NQU)
Last week’s closes: ESU settled at 3504.50, up 19.25 on Friday and 112 on the week, NQU settled at 11,991.75, up 39.00 on Friday and 429.75 on the week
Fundamentals: The S&P 500 traded to a new record high on the open last night and the Nasdaq 100 followed suit shortly after. U.S. benchmarks are broadly better ahead of the bell with two largely anticipated stock splits in focus. Apple (AAPL) will split 4:1 and Tesla (TSLA) 5:1; there is no doubting each’s announcement a few weeks back has brought a tailwind of enthusiasm. Will the event itself pave the way for the market’s record run to cool? Although such is overdue, according to Fox Business, historically speaking, the 10 biggest global brands that have had stock splits over the last 60 years have seen an average rise by 33% over the next 12 months. Only Alphabet (GOOGL) and Samsung finished lower one year out.
U.S. and China relations are also front and center after Beijing said they must now approve any sale of TikTok. Front runners include a bid by Microsoft-Walmart and Oracle. Just last week, China launched two missiles into the South China Sea as a show of strength and warning to the U.S. Despite the obvious, top level trade negotiators continue to praise progress between the two world powers and that is all the market has focused on. A set of data from China Sunday night included Manufacturing PMI, it came in below expectations at 51.0 versus 51.2 and 51.1 last month. The HSBC gauge on Manufacturing PMI is Monday night.
Technicals: The S&P 500 and Nasdaq 100 finished Friday’s session with a late surge. After not breaking lower intraday, it became common last week to see buying into the bell. Each index responded against first key support levels early on Friday, for the S&P this was 3485.50 and the NQ 11,916-11,925. The higher closes now align with our momentum indicators as well as previous levels to create our pivots at 3504.50-3509 and 11,991-12,015. Price action above or below here Monday will help dictate waves, but a failure again to break below first key supports (S&P now 3496.75), will likely pave the way for a better close.
Bias: Neutral
Resistance: 3517.25***, 3524.50-3527**, 3535-3545****
Pivot: 3504.50-3509
Support: 3496.75**, 3485.50***, 3466.25**, 3438.50-3446.75***, 3421.75-3423.50**, 3410.75**, 3397.50-3403***
NQ (September)
Resistance: 12,105**, 12,284**, 12,573***, 12,897****
Pivot: 11,991-12,015***
Support: 11,916-11,925**, 11,834**, 11,784*, 11,707-11,726***
Crude Oil (CLV)
Last week’s close: Settled at $42.97, down 0.07 on Friday and up 0.63 on the week
Fundamentals: Crude oil has held in positive territory for the entire session as it finds tailwinds from a bullish note by Goldman Sachs. They said the market is “skewed to a faster re-balancing” in 2021 with a main driver being “major oil producing companies keeping capital expenditure low”. The one-two hurricane punch last week has passed, and production in the Gulf remains lower, however, it was unable to decisively break Crude Oil out above key technical levels. The expectation of steadfast Chinese purchases, up from a record July, are also helping to keep a bid under the market. Furthermore, the EIA posted the fifth straight weekly drawdown of Crude stocks. The market now finds itself at an inflection point; if it cannot breakout now, we imagine a consolidation lower at minimum.
Technicals: We held a cautiously bullish approach for much of last week, but the latest leg of the crude rally has been unimpressive. Although price action has struggled to accelerate out above the $42.92-$43.15 pocket that encompasses the October contract’s 200-day moving average, March 6 settlement and momentum indicator it is holding above this crucial pivot and that is overall supportive. Still, we must completely neutralize our bias for now.
Bias: Neutral
Resistance: 43.52*, 46.37***
Pivot: 42.92-43.15***
Support: 42.31**, 41.81**, 41.46***
Gold (GCZ)
Last week’s close: Settled at $1,974.9, up $42.30 on Friday and up $27.90 on the week
Fundamentals: Gold completed an impressive week last week both fundamentally and technically. The Federal Reserve reinforced remaining accommodative for an extended period through Average Inflation Targeting and price action pounded into major three-star support aligning with the previous record highs from 2011 and responded. Fed Vice Chair Clarida said this morning he doesn’t see negative rates as an attractive option and thinks forward guidance can play a crucial role. Atlanta Fed President Bostic speaks at 9:30 am CT, he is a 2021 voter. We look to ISM Manufacturing tomorrow in a week of heavy data that concludes with Nonfarm Payroll.
Technicals: The rally from Thursday’s low has stalled at major three-star resistance at $1,981.70 to $1,987. Overall, gold is in a large range consolidation from 1900 to 2000 and we could see this continuing for a bit. Our momentum indicator comes in at 1974. While minor support at 1966.5-1967.1 was pierced briefly, the early dip stopped ahead of major three-star support at 1955.2-1957.5; a break below here would pave the way for continued selling on the session.
Bias: Neutral/Bullish
Resistance: 1981.7-1987***, 2020-2028***
Pivot: 1974
Support: 1966.5-1967.1*, 1955.2-1957.5***, 1946.5-1949**, 1940.7*, 1928-1932**, 1914.7**, 1907.4-1909.6***
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.
