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

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Blue Line Express

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We update our research throughout the trading day so be sure to visit the research page on our site!

E-mini S&P (December)

Yesterdays close: The S&P settled at 2563.50; about .5% from its new all-time high of 2577.25 and against the support we discussed at 2558.50-2562.25 with a low of 2561.50.

Fundamentals: Global equity markets have edged higher this morning, shaking off yesterdays weak close. Technology and Industrials weighed on the market through yesterday and price action in the S&P retreated from its seventh all-time high in ten sessions. This appears to be a little bit of an earnings rotation which would imply there is nothing to worry about as long as others come to the rescue as we have consistently seen. However, doubt on tax-reform being accomplished in 2017 would pose a larger issue for this market. We do believe that much of this last 2-3%, at least, is reliant on tax reform and to a lesser degree no surprises from the Fed (both on the policy side and leadership). This morning is a gauntlet of earnings that include Caterpillar, GM, United Technologies, McDonalds, Lockheed Martin, 3M, Eli Lilly and more. Manufacturing data is also due at 8:45 am CT. We will look to follow up the reaction on our daily Midday Update video that can be seen on

Technicals: The S&P traded right into the key support level we discussed to be patient for yesterday at 2558.50-2562.25. It has held beautifully into this morning with a higher session low of 2562.25 vs 2561.50 yesterday. This is where you want to step in and trade it just as we spoke of last week but also remember a stop is imperative. However, a close below this level could easily bring pressure to last weeks low.

Bias: Bullish/Neutral

Resistance 2581.75**, 2595-2600**

Pivot - 2571.75-2474

Support 2558.50-2562.25**, 2550*, 2439.25-2443**, 2507.75***

Crude Oil (December)

Yesterdays close: Settled yesterday up 6 cents at 51.90.

Fundamentals: Crude Oil has continued to edge higher this morning on upbeat comments from Russia Energy Minister Novak that compliance in the production cut deal has been 102% (106% by the non-OPEC side). This comes at a time when doubt has overshadowed Russias intentions. Furthermore, Saudis Energy Minister al-Falih has been upbeat on a new deal and reiterated their flexibility to achieve it ahead of a meeting between the two ministers in early November. Let the games begin; with more than a month before the official November 30th meeting two of the most powerful men in the industry have begun to jawbone a common goal. News on the Iraqi front now shows that 300,000 bpd are flowing to Ceyhan, an increase from the 260,000 but still only at half the normal level. Inventory expectations will trickle in throughout the day and we have API due at 3:30 pm CT.

Technicals: Price action has taken out yesterdays high and trade to 52.37. The tape remains at this level but first resistance has stood strong. Considering several factors, we have now combined first and second resistance into a pocket; this is ahead of inventory volatility but also due to multiple trend lines that date back to January 3rd, April 12th and September 28th on both the December-only and front-month charts. Additionally, the 52.41 and 52.86 levels have their own significance. As price action tests into here, the bulls must achieve a close above 53.11 in order to secure a bullish breakout and potential melt-up to the $55 mark. A failure here though would secure another lower peak.

Bias: Neutral

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

Support 51.51-51.79*, 50.51-50.67**, 50.13**, 49.44***, 48.69**

Gold (December)

Yesterdays close: Gold recovered well off its low of 1273.6 to settle back into support at 1277.9-1281.3 at 1280.9.

Fundamentals: Gold prices were dwindling lower yesterday but some news across the wire though again denied referenced the U.S Airforce preparing B-52 Nuclear Bombers to potentially be on 24-hour alert reinvigorated buying. We believe price also played a role in the knee-jerk higher as Gold was nearing a critical support level. Equity markets also came under pressure throughout the session and this attracted buyers. We continue to watch the Dollar Index very closely as it has had a very unimpressive rally and is flirting with the 100-day moving average but unable to maintain price action above it; ultimately, we expect the Dollar to head lower for longer. Manufacturing data is due at 8:45 am CT, Durable Goods is due tomorrow, ECB Meeting Thursday and the first look at Q3 GDP on Friday.

Technicals: Price action closed in on major four-star support at 1262.8-1269 before ripping higher. Settling back into 1277.6-1281.8 was a small win for the bull camp. There is no imminent buy signal and the tape is trying to edge lower this morning but Gold is consolidating $80 from its high of the year and strong selling pressure seems to have abated. If you are long term bullish Gold and do not have exposure, you need to ask yourself why? We are here to help discuss the risk/reward factors and ways to play it. Call our trade desk at 312-278-0500.

Bias: Bullish/Neutral

Resistance 1286.9*, 1291-1292.9**, 1298.4-1302.2**, 1308.4-1312.6**

Pivot - 1277.6-1281.8

Support 1262.8-1269***, 1243.6**

Natural Gas (December)

Yesterdays close: Settled yesterday at 3.156 and failed to hold ground at the 3.16-3.1825 level or retest its gap open high of 3.198.

Fundamentals: There is no new news this morning as we remain positive on the longer-term fundamentals. Weather models have favored colder fronts for much of the Midwest but the east coast and NYC are expected to see 60 degrees hold through next week with only a pair of evenings getting below 50. We expect storage to begin to decrease and stay on that path this week or next week.

Technicals: Yesterdays price action was a little disappointing after such a strong open Sunday night. Support at 3.113-3.127 has held well but the tape is unenthusiastic after trading to a gap open high of 3.198 Sunday and two lower peaks into this morning at 3.182 and then 3.165. We remain long term bullish and last weeks key reversal has laid the groundwork for a strongly bullish setup over the intermediate term. However, it will be prudent to capitalize in some degree and maybe for you that is rolling stops up at a minimum.

Bias: Bullish

Resistance 3.16-3.1825**, 3.22**, 3.33-3.36***

Support 3.105-3.127**, 3.056-3.074*, 3.012-3.042***, 2.753-2.7565***, 2.486-2.522****

Blue Line Express

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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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