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

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Crude Oil (December)

Yesterdays close:Crude settled yesterday at 52.26 with a solid battle off of first support.

Fundamentals:Prices began dipping last night after Chinese GDP data. However, reports that Chinas refining rose to a record of 12.06 mbpd was more than likely the culprit for lower price action. Chinas teapot refineries have been gaining production and pose a true threat to long term prices as exports grow. GDP data was in line with expectations but the overall read was mixed; better Industrial Production but weaker on Fixed Asset Investment. Throw in an unenthusiastic EIA report yesterday and the market is consolidating lower. OPECs Secretary General is speaking this morning and is very positive on the marker rebalancing as well as oil demand, expecting it to reach 100 mbpd by 2020.

Technicals:Price action recovered well through midsession yesterday to notch a close back above 52.03. Still, the three-tiered resistance that begins at 52.41 poses a tough hurdle to the bull camp and price action which reached a high of 52.39 last night has again struggled to push through here. Major support remains at 51.42-51.73 and the tape has bled to a session low of 51.38. Traders must keep an eye on the 50-day moving average at 49.93 because it is nearing the 200 dma at 50.74. Though there is no signal yet but this golden cross is bullish and the 50 has not been above the 200 since April.

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

Pivot 52.03

Support 51.42-51.73**, 50.74**, 49.93**, 49.44***, 48.60**

E-mini S&P (December)

Yesterdays close:The S&P set yet another record high yesterday trading to 2562.25 before settling at 2560.

Fundamentals:Global equity markets are lower this morning with Europe and Asia leading the way. The DAX has lost .6% as Spain and Catalonia concerns are heightened as Spain will now strip Catalonia of its autonomy after they missed a deadline to renounce its independence. Nikkei futures are down about 1%. Chinese GDP was in line with expectations but the overall read that included Fixed Asset Investment and Industrial Production was mixed. There has been no unusual currency volatility in the Yuan but as we noted yesterday, it is key to keep an eye on the Chinese currency as well as news coming out of their twice a decade party meeting. We have Jobless Claims and Philly Fed Manufacturing due at 7:30 am CT. Apple is a big mover this morning, down more than 1.5%. Unilever missed earnings and is down more than 4%. Phillip Morris appears to have missed earnings and is trading down more than .5%, Verizon is also due this morning among others. We look to GE, Procter & Gamble as well as Schlumberger tomorrow morning. Lets also not forget today is the anniversary of Black Monday in 1987 but more importantly Janet Yellen is set to meet with President Trump to discuss the Fed chair.

Technicals:SOUND THE ALARMS! The S&P is down more than .5% this morning. After trading to a new all-time high in five out of seven sessions and a higher low for seven straight sessions, I think we can all agree that it is about time to see a move lower. Essentially, this slow grind higher creates a sloppy ascending wedge, a bearish pattern. Price action has fallen back to a session low of 2542.50, squarely on our first key support. We have pointed to this level as a solid buy opportunity and we still believe so, it is imperative that you use a stop. A close below this level though will likely open the door to a healthy correction of 2%.

Resistance 2558.50-2562.25**, 2595-2600**

Support 2439.25-2443**, 2507.75***

Gold (December)

Yesterdays close:Gold settled yesterdays session down $3.2 at 1283. This held support at the 1280.2-1281.1 level.

Fundamentals:Global equity markets are under pressure this morning and safe haven buyers are stepping into the metal. The Catalonia situation has taken a heightened step with Spain taking away its autonomy after they failed to meet a deadline to renounce independence. We have Jobless Claims and Philly Fed Manufacturing data this morning at 7:30 am CT. Traders must key into any news on the meeting Janet Yellen has with President Trump today. Though it is all but sure she will be replaced, positive vibes should be healthy for the Gold market. Remember, a key factor in Gold failing above 1300 this week was the emergence of John Taylor as a potential frontrunner to replace Yellen. Taylor and protg Kevin Warsh, another leading candidate for the chairmanship, are both more hawkish than Yellen. Still, we remain long term bullish Gold simply because no matter who is leading the Fed we do not believe that rates will go higher for longer. Furthermore, there are two things President Trump does not want, higher real rates and a stronger Dollar.

Technicals:This price action is almost a win for the bull camp, we must see a settle above the .382 retracement at 1289.4 in order to begin to neutralize this weeks weakness. A move out above 1293 should encourage further buying to test the psychological 1300 mark.

Resistance 1289.4**, 1293**, 1298.4-1302.8**, 1308.4-1312.6**, 1324.3**, 1341-1344.6***, 1362.4

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

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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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