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Blue Line Morning Express (Gold, Oil, S&P)

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Crude Oil (December)

Yesterdays close: Crude retreated about 1% from session highs to settle in the middle of its daily range at 52.14.

Fundamentals: Conflict in northern Iraq continues to keep a premium in the market. However, Iraqi forces reportedly captured the Kurdish government headquarters and took control of state owned oil fields in the Kirkuk area yesterday. Turkey ultimately opposed the Kurdish independence which jeopardized the Mediterranean pipeline. This news contributed to yesterdays price action. President Trump facing off with Iran and the nuclear deal has also added a premium. Inventories come into the picture later today with API. Early expectations for Wednesdays EIA are for a draw of 4.75 mb with draws of about 1 mb for the products. These expectations at this time of year have deflected the bears at a minimum.

Technicals: Price action has stayed within yesterdays range. Today is November options expiration and the contract is trading about 27 cents below December right at $52. Barring any new geopolitical developments, we imagine price action staying contained at and or just below the $52 mark into settlement today as open interest for the $52 calls is the highest within range of the market and comes in at 14k. Furthermore, OI in the 51.50 and 51 calls outweigh the puts nearly 2-1. Resistance one, two and three will be tough levels to crack and have done their work in keeping the buyers in check.

Bias: Neutral/Bullish

Resistance 52.41**, 52.86**, 53.11***, 53.76*, 55.02***

Pivot 52.03

Support 51.73**, 50.79**, 49.86**, 49.44***, 48.57**

Gold (December)

Yesterdays close: Gold settled yesterday at 1303; down from Fridays close at 1304.6 and well off the session high of 1308.4. Price action bled below 1300 before the electronic close.

Fundamentals: The US Dollar strengthened into the end of yesterdays session on news that not only is Stanford economist John Taylors hat in the ring to become Fed Chairman but President Trump is likely favoring him following their meeting; Taylor is seen as the most hawkish of the candidates. NY Empire State Manufacturing yesterday morning was the strongest since April 2010 and helped set the tone for the Dollar off of early session lows. The Dollar is seeing further strength on weakness in the Euro after Sentiment data missed the mark this morning, CPI data was in-line with expectations. A stronger Dollar will put pressure on Gold. We look to Import and Export Price Index data this morning at 7:30 am CT, Industrial Production at 8:15, Fed official Harker to speak at noon and Federal Budget Balance along with Treasury Transactions later this afternoon.

Technicals: A disappointing session yesterday for the bull camp following the sharp reversal from session highs that puts the metal clearly back below 1300. First minor support comes in this morning at 1291, while stronger support comes in at 1285.6 and the bulls must hold this .50% retracement today to turn a budding failure into a consolidation. Only a close back above the 1300.9-1302.3 level will negate this weak price action.

Bias: Bullish/Neutral

Resistance 1300.9-1302.3**, 1308.4-1312.6**, 1324.3**, 1341-1344.6***, 1362.4

Support 1291*, 1285.6**, 1280.2-1281.1**, 1262.8-1269***, 1243.6**

E-mini S&P (December)

Yesterdays close: Another quiet session and another all-time high, 2557.75. Also, five straight sessions with a higher low.

Fundamentals: Despite strong headliners, the S&P is little changed this morning. Netflix was the bell of the ball yesterday and produced strong earnings, it is trading up nearly 1.5% in premarket this morning. Johnson & Johnson, Goldman Sachs and Morgan Stanley are all up more than 1% this morning on strong earnings. Import/Export Price Index is due at 7:30 am CT and Industrial Production at 8:15. Fed official Harker is due to speak at noon and we have Federal Budget Balance and Treasury Transactions expected later today.

Technicals: Resistance remains at the 2558.50 level and has yet to be breached. As we said yesterday, this is a tough tape to fight. If you have not been long or have not capitalized in some fashion on the breakout above the 10-year trend resistance at 2507.75 than you are best to not step in after five sessions in a row with a higher low and four out of five with a new all-time high; wait for some sort of .5% move against first support at 2439.25-2443.

Bias: Neutral

Resistance 2558.50**, 2568*

Support 2439.25-2443**, 2507.75***

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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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