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E-mini S&P (December)

Yesterdays close: Finished at 2576.75, recovering well off the session low.

Fundamentals: We await this mornings Nonfarm Payroll report at 7:30 am CT to give the heartbeat of the U.S economy. Octobers report is supposed to bounce back strongly and make up for the hurricane riddled prior months. Expectations come in at 310K jobs created and remember Average Hourly Earnings is now nearly as important (just as important in reality, but people do love the headline creation number). Expectations for Earnings comes in at .2% on the heels of a whopping 5% last month, the highest in a year and a half. We do not expect todays report to derail equity market gains and we have ISM Non-Manufacturing at 9:00 am CT, right after the PMI read at 8:45. The Fed has spoken this week, December is priced in and inflation remains a key concern. Minnesota Fed President Kashkari is excepted to speak at 11:15 am CT. The market was jittery early yesterday ahead of the release of the tax-reform bill, but a warm reception helped price action recover. President Trump, as expected, nominate Powell to replace Yellen as Fed chair. Apple released earnings after the bell yesterday and is trading up 3% early this morning.

Technicals: Yesterday was a big technicals win for the bull camp, price actin held two tests to key support at the 2561.25-2563.25 level before reversing sharply and nearly finishing at a record close. Traders should keep an eye on the NQ which after yesterdays reversal is attempting to build a bull flag. Resistance on a closing basis remains 2581.75 and a close above here today will add more fuel. While a close below 2571.75-2572.75 will neutralize the tape, a move below first key support and yesterdays low will get things going to the downside.

Bias: Bullish/Neutral

Resistance 2581.75**, 2595-2600**

Pivot - 2571.75-2572.75

Support 2561.25-2563.25**, 2555.50**, 2539.25-2543***, 2507.75***

Crude Oil (December)

Yesterdays close: Settled yesterday at 54.54 but edged higher into the electronic close.

Fundamentals: Crude Oil elevated higher through the end of the session as the weekend neared. There was not new news outside of the already bullish fundamental backdrop from exports to backwardation, other than the escalation of fighting in northern Iraq. As of this morning we have seen an uptick in flow to Turkey back to 360k. Baker Hughes rig could data is due today at noon CT.

Technicals: The highs of the year and major three-star resistance are squarely in the crosshairs today and we expect this level to be taken out. Remember, a close above here is extremely bullish and should lead to the next leg to 58.97. Price action likes to find a bottom Thursday as shorts begin to pare positions ahead of the weekend, sometimes this happens overnight into Friday, this week it happened early in Thursdays session and we are viewing this as a short-term bullish factor to accompany all bullish technical indicators that we discussed this week. The 50-day moving average is now trading nearly 50 cents above the 200 day as bullish momentum increases. RSI is now above 70, signaling that the market is in overbought territory but truly stands out as the only factor holding this market back.

Bias: Bullish

Resistance 55.02-55.25***, 56.51-56.79**, 58.97***

Pivot 54.45-54.54

Support 53.76-53.90**, 52.86-53.11***, 52.07**

Gold (December)

Yesterdays close: Settled up .80 at 1278.1

Fundamentals: Todays Nonfarm Payroll report at 7:30 am CT will play a crucial role for the Gold trade. Expectations come in for 310k jobs created in October with an Average Hourly Earnings read at .2%. Job creation is expected to bounce back strongly after the hurricane riddled two prior months. A better than expected read that ultimately shows above .2% Average Hourly earnings will put strong pressure on the metal. ISM Non-Manufacturing due at 9:00 CT is not to be underestimated, this is a data point that we watch very closely in the Gold trade. Yesterdays tax-reform bill was warmly received and President Trump, as expected, nominated Powell as the next Fed Chair; neither did much for Gold other than a knee jerk to 1285 ahead of the tax-reform unveiling. We remain long term bearish on the Dollar and today will be critical to see how quickly its recent rally gets sold into.

Technicals: Resistance at the 1280.3-1280.8 level continues to stand strong, Gold must close out above here in order to neutralize these waves of selling. Yesterdays quick spike ran into minor resistance at 1286.1. Us bulls want to see a miss today from Nonfarm Payroll in order to light a fire under the metal so that it can achieve a close above 1291.3-1292.9 and squeeze shorts. A better than expected read would put pressure on the tape, but ultimately the bears need to achieve a close below major four-star support to signal a failure.

Bias: Bullish

Resistance 1280.3-1280.8**, 1286.1*, 1291.3-1292.9**, 1298.4-1300**, 1308.4-1312.6**

Support 1262.8-1269***, 1243.6**

Natural Gas (December)

Yesterdays close: Settled green at 2.935

Fundamentals: Yesterdays EIA storage report showed a build of 65 bcf, more than the 62 bcf expected bur largely in line. Fears of higher than expected storage levels at the end of the injection season remain and this was the cause for much of the selling earlier this week as temperatures remain very moderate (as well as key technical levels being breached). Yesterday was also a win for the bull camp as a D.C Appeals Court upheld a ruling to allow three Natural Gas terminals to export liquefied natural gas. This was like a ruling in August that allowed the exporting of LNG.

Technicals: Price action settled at and has nudged above first minor support. The 2.981 level will be a hurdle that we think it can achieve today. However, the real hurdle would be achieving a close back above 3.012-3.0225 which would neutralize recent weakness at just the right time.

Bias: Neutral/Bullish

Resistance 2.93*, 2.981**, 3.012-3.0225***, 3.054-3.064**, 3.103**, 3.179-3.198***, 3.22**, 3.323-3.36***

Support 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

10-Year (December)

Yesterdays close: Settled positive at 125-045

Fundamentals: The treasury market did exactly what it was supposed and what we see it do quite often; price in risk. The market priced in the risk that we would hear a more hawkish Fed than expected (even the small chanced of a surprise hike) as well as the small chance that President Trump nominated Taylor instead of Powell. These were small odds yes, but that is what the Treasury market is here for and most importantly imagine all the long treasury hedge funds out there that needed to reduce their risk ahead of some a huge week even if it was a minor amount of uncertainty. Nonfarm Payroll is coming up this morning and a poor read will have the buyers right back in the mix. ISM Non-Manufacturing is not to be underestimated either. Solid reads across the board will finish the week on a negative note.

Technicals: Our bias has begun to shift this week as we are now Neutral/Bullish. However, price action is testing right into firs key resistance and we do expect to see volatility with the Nonfarm and ISM read; a close above this level will open the door to a further run in the near-term. We do want to emphasize that our bias is longer term Bullish and traders must remain nimble.

Bias: Neutral/Bullish

Resistance 12502-125035**, 12519**, 125255**, 12601**, 12615***

Support 12428*, 12419**, 12400**, 12222 12229***

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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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