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E-mini S&P (December)

Yesterdays close: Lost 8 ticks on the session but recovered nearly 1% from lows yesterday to settle at 2584.

Fundamentals: Tax-reform remains front and center to finish out the week and the House Ways and Means Committee advanced a bill that the full House will vote on next week. The Senate is still on their own track with a bill introduced yesterday and is expected to be marked up Monday. For traders, the process is dizzying and ultimately has encouraged profit taking, not to say there are not buying opportunities intraday. Treasury yields have edged up firmly to into this morning and yields in China remain at three-year highs. The Chinese central bank had to again inject liquidity to loosen monetary conditions. Yields in the U.S began climbing after the 30-year bond auction yesterday but have risen well overnight. This could simply be an overreaction/repositioning to the long-side (of prices) following the Fed meeting and an ensuing relief of a potential geopolitical flare-up (Saudi and Trump in Asia). Whatever the reason might be, this is something to watch closely. Michigan Consumer data is due at 9:00 am CT today.

Technicals: Price action traded to a low of 2563.25 yesterday and with each test to this key support, the level itself gains importance. However, we are not ready to make it a major three-star level, but understand that a move below here should open the door to 2539.25-2543. Session highs come in at 2585.75, yesterdays settle at 2584 and the trend line we have discussed the last two days is now at 2583; major resistance now clearly comes in at 2583-2585.75 and the bulls must achieve a close above here in order to regain the upper-hand. The bears have a slight edge but must keep price action depressed below 2573.50-2574.25 in order to clearly see this. We neutralized our bias yesterday and now that price action could not maintain yesterdays close among other factors we give a Neutral/Bearish bias.

Bias: Neutral/Bearish

Resistance 2583-2585.75**. 2594.50-2596**, 2600*, 2616**

Support 2573.50-2574.25**, 2561.75-2562.25**, 2555*, 2539.25-2543***

Crude (December)

Yesterdays close: Gained 37 cents on the session to 57.17

Fundamentals: Crude remains constructive heading into the weekend and on the surface we do not see the picture painted this week to change ahead of it. The November 30th OPEC meeting is on everyones calendar, but we must not forget that OPECs Monthly Oil Market Report is due out Monday morning and the IEAs is due out Tuesday. Furthermore, Chinese data is not through yet and comes into the picture Monday evening and December option expiration is Wednesday. December is the most active of any contract and large open interest could work to tighten up price ranges barring any fundamental surprises. Oil rigs have dropped 39 since recovering to a peak in August, todays data is due at noon CT.

Technicals: We remain bullish ahead of the weekend but are becoming more cautious after a strong run and as RSI has remained above 70 for more than a week now. In the near-term, we could now actually make the argument to sell to go short against 58.97, though not before Sundays reopen. Key support at 56.51-56.79 is holding tremendously but a move below here would encourage profit taking from the longs. We also long forward to todays CoT report, especially since price action has been rangebound since Tuesdays cutoff.

Bias: Bullish/Neutral

Resistance 58.97***

Support 56.51-56.79**, 56.18*, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

Gold (December)

Session close: Settled at 1287.5, the highest since October 19th.

Fundamentals: The problem with Gold right now is that there is no real catalyst. Dont get us wrong, the potential for a catalyst is literally right around the next corner. The Dollar has retreated nearly 1% from recent highs and the catalyst that we lean on most, for the long-run, is a weaker Dollar. We may not see the Dollar take out the 92 level again this year, but we anticipate this feat in the first quarter of next. Michigan Consumer data is due at 9:00 am CT and tax-from is todays happy hour drinking work.

Technicals: Key resistance at the 1291.3-1292.9 level has kept price action in check and the bulls must achieve a close out above here in order to begin to squeeze shorts. It will be key to keep the tape above support at the 1280.5-1281.2 level which would leave the door open for strong price action to start next week.

Bias: Bullish

Resistance 1291.3-1292.9**, 1298.4-1300**, 1308.4-1312.6**

Support 1280.50-1281.5**, 1262.8-1270***, 1243.6**

Natural Gas (December)

Yesterdays close: Settled at 3.20

Fundamentals: Yesterdays inventory report was in line with expectations showing a +15 bcf. This is expected to be peak storage and going forward inventories would be drawn down. Prices might have gotten a little out in front of themselves with this turn expected but a healthy consolidation would be a great appetizer to a colder than expected winter.

Technicals: We remain bullish and yesterdays close above major three star resistance was important, however, it was not convincing. We would like to see a green day to finish out the week. Resistance at the 3.22 level is working to keep the tape in check. Bulls must be careful because a very healthy consolidation here could lead to a test of 3.08 before bouncing back firmly.

Bias: Bullish

Resistance 3.179-3.198***, 3.22**, 3.297-3.353***, 3.55**, 3.67**

Support 3.08**, 3.035-3.051** 2.984-2.998***, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

10-Year (December)

Yesterdays close: Settled at 12506

Fundamentals: Yields (inverse to price) are mostly higher across the world this morning. The 10 year (price) put in a high yesterday after the 30-year auction and it has continued to bleed into this morning despite a weaker Dollar and equity market. Chinas 10-year yield remains at three year highs as monetary conditions have tightened (and countered with liquidity injections). Michigan Consumer data is due at 9:00 am CT today.

Technicals: We moved closer to Neutral yesterday with a Neutral/Bullish and today are outright Neutral. Price action took out first key support at 12502-12535 and the bulls must achieve a close back above here to neutralize weakness. First key support comes in at 12419 and this appears to be in reach early next week.

Bias: Neutral

Resistance 12519**, 125255**, 12601**, 12615***

Support 12502-125035**, 12419**, 12400**, 12222 12229***

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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