E-mini S&P futures firmed into the close yesterday to finish out a quiet session, states Bill Baruch of BlueLineFutures.com.

E-mini S&P (September) / E-mini NQ (September)

S&P, last week’s close: Settled at 4444.25, up 10.25
NQ, last week’s close: Settled at 15,187, up 5.25

Price action held a higher intraday low of 4424 through the morning, against Thursday’s 4419.50, but the E-mini NQ traded to the lowest since June 29 before paring losses. However, the E-mini Russell 2000 led the way, gaining 1.7% and turning positive on the month after last week’s spill. On that note, if you are looking for a place of outperformance in the second half of the year, look no further than the E-mini Russell 2000 for a few big reasons. First, earnings of the Russell 2000 are expected to grow 29% next year. Next, it was rebalanced at quarter-end, and the cream has risen to the top. Also, it has underperformed dramatically over the last five years as a concentration in the large-cap leads the market higher. When this happens, it simply outperforms over the next five years every time. Lastly, if you are a portfolio manager who sat in too much cash and underperformed this year, are you going to close the gap by buying large-cap stocks? Of course not. We expect a rush to small caps in a chase for yield as the many underperforming portfolio managers fight to keep their jobs.

E-mini S&P futures are nudging major three-star resistance at 4454-4458.75, aligning the initial spike on Nonfarm Payroll with the 50% retracement off the Sunday night low back to 4498, among other volume indicators. We need to see steady price action above this level through the intraday open to pave the way for a retest to the Friday high and a potential gap cover from last Wednesday’s close at 4483.75. Similarly, the E-mini NQ is testing major three-star resistance at 15,250-15,276. It traded to a new low yesterday and held minor support at 15,063 before rallying. This now brings a formidable line in the sand at 15,023-15,063, similar to the strong waves of support in the E-mini S&P detailed below.

Bias: Neutral/Bullish

Resistance: 4454-4458.75, 4465, 4471-4476, 4483.75, 4488.25-4493.75, 4498-4500

Support: 4439-4444, 4431.75-4434, 4419.50-4424, 4407.25-4409.75, 4399.25-4401.50, 4368.50-4371.50

NQ (Sept)

Resistance: 15,250-15,276, 15,309-15,314, 15,337-15,374, 15,475-15,500

Pivot: 15,172-15,191
Support: 15,100-15,139, 15,025-15,063, 14,963-14,986, 14,856-14,898 

Crude Oil (August)

Yesterday’s close: Settled at 72.99, down 0.87

Crude Oil futures settled down more than 1% yesterday but never traded below the settlement, and buyers stepped in front of major three-star support at 72.43-72.65. Price action is making another run at $74 at the 8:00 am CT intraday open. There seems to be a risk-on undertone in the energy complex that should not be taken lightly if Crude Oil were to close the week out above major three-star resistance at 75.10-75.16. Inventory data will start coming into the picture today as estimates are released and conclude with the private API survey at 3:30 pm CT, but it will be the EIA’s Short-Term Energy Outlook in focus at 11:00 am CT.

Bias: Neutral/Bullish

Resistance: 73.86-74.00, 74.29-74.65, 75.10-75.16, 75.70

Pivot: 73.40

Support: 72.97, 72.43-72.65, 71.80, 71.19-71.34, 70.98, 69.93-70.33

Gold (August) / Silver (September)

Gold, yesterday’s close: Settled at 1931.0, down 1.5
Silver, yesterday’s close: Settled 23.345, up 0.056

Gold and Silver futures are finding a tailwind from easing Treasury yields and Japanese Yen strength, coupled with buying off support ahead of CPI tomorrow. The precious metals complex is at a critical fundamental juncture going into tomorrow’s inflation release and the Fed meeting later this month. We believe a capitulation in the Treasury market is already underway, but it is something that could take two to four weeks to play out and resolve through the Fed meeting fully. It started last week as planned issuance in Treasuries of one year or longer drove a melt-down in prices and unfolds through the potential building recovery and slowing economic conditions. In other words, this would be a month-long event.

In the near term, a constructive path in Gold and Silver futures would consist of higher lows. Ideally, price action can hold above first key support in each, a much higher lower than yesterday, as the tape battles through digesting tomorrow’s inflation data.

Bias: Neutral/Bullish

Resistance: 1938-1943.4, 1949-1949.6

Pivot: 1933.9-1934.9

Support: 1929.7-1931.2, 1925.4-1926.1, 1917.7-1919.9, 1914.1-1915.4, 1906.2-1911.6

Silver (September)

Resistance: 23.34-23.37, 23.45-23.54, 23.98

Pivot: 29.28

Support: 23.16-23.19, 22.89-22.97, 22.72-22.82, 22.48-22.54, 22.05-22.40

Learn more about Bill Baruch at Blue Line Futures.