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As you know, our whole report goes out each morning to clients and Free Trial subscribers berfore 7:00 am CT. Enjoy our Fundamnetals below. But please register for a Free Trial of 1 or all 5 of of our Blue Line Express daily commodity reports in order to get all of our great insight; Techinicals, Fundamenals, and proprietary Bias and Levels. E-mini S&P, Crude, Gold, Natural Gas and the 10-year.

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E-mini S&P (June)

Yesterdays close:Settled at 2718.75, down 4.25

Fundamentals:The S&P traded to a high of 2732 early yesterday and regained 1% from Tuesdays pullback. As we discussed earlier in the week, this consolidation is fundamentally and technically healthy. In fact, the S&P has held ground in the face of the Dollar Index rising 1% and the 10-year Note hitting the highest yield since 2011. The excitement of last weeks breakout rally quickly shifted to the uncertainty on trade talks. Here, we still have not seen any substance, yet equity markets are holding ground. Considering these headwinds, todays close will be absolutely crucial and we will discuss the levels in the Technical section below. Price action quickly took it on the chin yesterday after President Trump said he did not see any progress from the trade talks with China in Washington. After hitting a session low of 2711, price action did recover on hopes that his comments were another negotiating tactic. But again, this shows the focus on what drove last weeks breakout has now shifted in a new week to dependence on trade talks. News broke after the reopen last night that China will offer the U.S a $200 billion cut in the trade deficit and increase imports of U.S products. This quickly firmed the tape but while overnight Chinas Foreign Minister denied such reports. Additionally, the NAFTA talks do not seem to be progressing either. News on both fronts will be critical in defining where the market finishes the week. We look to earnings before the bell from Deere and Campbell Soup. Cleveland Fed President Mester was upbeat on the economy early this morning. With no economic data to be released, Fed Governor Brainard speaking at 8:15 am CT is the most important event on the calendar. Dallas Fed President Kaplan will make another appearance on the week at the same time. Lastly, keep an eye on developing reports regarding Ebola. For now, we only say this because it was a catalyst for tremendous market volatility in 2014.

Technicals:Price action traded to first key resistance at 2729.50-2731 but could not hold ground yesterday morning, we have expanded this level slightly to take in yesterdays high; a move above here today would be bullish and signals a path. Strong resistance still comes in at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Crude Oil (July)

Yesterdays close:Settled at 71.57, up 0.01

Fundamentals:Crude Oil is trading up about $1 on the week. After the Brent contract briefly achieved the $80 mark yesterday, it is elusive into this morning. Iran and geopolitical tensions in the Middle East are still front and center but are starting to fall off the headlines. This means that news on this front could have more of a surprise factor ahead of the weekend; bullish possibilities. Other than that, the focus will be Baker Hughes data due at noon CT. Rig counts are at the highest since 2015, but stable production increases are priced in.

Technicals:Price action achieved our target of 72.35 with a high of 72.30 in the June contract by 72.37 in the now front month July. We began exuding caution and the need to capitalize when this first went to 71.80 last week. First key support aligns ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Gold (June)

Yesterdays close:Settled at 1289.4, down 2.1

Fundamentals:Yesterday, Philly Fed Manufacturing data did not do Gold any favors, but just as we discussed for the Euro on last nights FX Rundown, the Dollar did not extend gains; this should elude to a directional exhaustion. Rising Treasury yields has also been a tremendous headwind for Gold prices; we said yesterday that 11 out of every 10 traders are bearish treasuries. We are looking forward to seeing a new record short Commitment of Traders in the 10-year later today, one that should achieve more than 1.2 million short positions. Additionally, we look forward to potentially seeing a neutral CoT report in Gold for the first time since traders were net-short in 2015; we all know how that turned out.

Technicals:We will begin to reintroduce a minor Bullish Bias stance today because ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Natural Gas (June)

Yesterdays close:Settled at 2.859, up 0.044

Fundamentals:Price action sold off into yesterdays storage report before ripping higher on a slightly larger build than expected (106 vs 105). This signals that the market wants to go higher and furthermore, that the technicals are now attempting to constructively define a new floor. We have been adamant that we are looking to bullish catalysts in late June and through July.

Technicals:Yesterdays low of 2.78 stopped short of first key support and the reversal back above and close above ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

10-year (June)

Yesterdays close:Settled at 118165, down 001

Fundamentals:We do not believe the yield will remain above 3% for long. While media and analysts point to the data and rising prices; this is simply to fit a narrative of market direction. This was a pure technical breakdown with little support from economic data. Remember, wage growth missed, CPI missed, and Retail Sales arguably missed. Most importantly we look forward to seeing another record short position on todays CoT. Fed Governor Brainard speaking at 8:15 am CT is the most important event on the calendar.

Technicals:Price action is beginning to show the slightest bit of exhaustion to the downside and considering how large the short position is, we could see this turn quickly. We will reintroduce a minor ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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About the author

Bill Baruch is President and founder of Blue Line Futures a leading futures and commodities brokerage firm located at the Chicago Board of Trade. Blue Line’s mission is to put the customer first and bring YOU the best customer service, consistent and reliable research and state of the art technology. Bill has more than a decade of trading experience. Working with clients he focuses on developing trading strategies that present a clear objective for both long and short-term trading approaches. He believes that in order to properly execute a trading strategy, there must be a well-balanced approach to risk and reward.

Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER which followed running a trade desk at Lind Waldock and MF Global.

Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications.

Contributing author since 10/6/17 

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