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Morning Express - Blue Line Futures

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E-mini S&P (December)

Yesterdays close: Gained 2.5 on the session finishing at 2582

Fundamentals: As traders monitor the ECB panel this morning with Yellen, Draghi, Kuroda and Carney we also await key inflation data with PPI due at 7:30 am CT. Data out of the Europe was overall mixed this morning with German Sentiment missing the mark but the Eurozone read coming in stronger. GDP was in line with expectations and around 1:30 am CT the Euro traded through major three-star resistance and to the highest level since the ECB meeting on October 26th. Tax-reform remains at the forefront and yesterday Treasury Secretary Mnuchin said that the House and Senate are very close. Equity markets keyed off this to work back to unchanged on the session, however, we credit the technical ground work against first support as the driver. All year traders have believed tax-reform will get done, and in all likeliness, it will. The market is more worried about corporate taxes on the surface of this plan and not delaying such. St. Louis Fed President Bullard speaks at 7:15 am CT and new Atlanta Fed President Bostic at 12:05. Chinese data last night marginally missed the mark but ultimately this has gone unnoticed. GDP is due out of Japan this evening.

Technicals: Price action traded to a low of 2570 yesterday and against that of Fridays. First key support at 2573.50-2574.25 was breached but only for a short period of time just ahead of the NYSE open. Ultimately, the intraday session did not trade below support. Still, resistance at the 2583-2585.75 is also holding strong and the door is still open for the bear camp. If you have traded against this level, you are doing just fine and it is more of a matter of how much you are looking for or maybe you have traded against this level more than once now. We remain Neutral/Bearish but keep in mind we also want to find a place to become Bullish once again.


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

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

Crude Oil (December)

Yesterdays close: Gained 2 cents on the session but did run stops below first support.

Fundamentals: The IEA released their monthly Oil Market Report this morning and cut Crude Oil demand growth for 2017 and 2018. Importantly, they noted the recent rise in prices and question the fundamental backdrop on how the market balance in 2018 does not look as tight as some would like. The comments and data noticeably contradicts that of yesterday from OPEC. Price action has begun to weaken, and we maintain that the key this week, more than these reports and most likely more than the EIA (barring a tremendous outlier), is December option expiration.

Technicals: Price action is trading heavily but clinging to first support. As we discussed yesterday, a move to $55 would hurt the most amount of people and this for us is reason enough to believe that it is in the cards. However, once option expiration is over tomorrow we should see renewed buying to finish out the week and into the December contract expiration. A selloff due to option expiration will be a great way to cleanse the over-extended Commitment of Traders which reported the largest long position and net-long position since the week of March 7th where a sparked a 12.5% selloff ensued. We turned Neutral/Bearish yesterday and will remain such as traders must be nimble in this volatility.


Resistance 57.15**, 57.92**, 58.97***

Support 56.41-56.51**, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

Gold (December)

Yesterdays close: Gained 4.7 on the session to finish at 1278.9

Fundamentals: Gold is fighting against optimism on tax-reform and global growth. This morning the Dollar Index is down .25% but Gold is down .5%. Renewed and revived growth out of Europe has driven yields higher and ultimately Gold can only fight so hard without an outside catalyst. Last week, President Trumps Asian trip attracted geopolitical speculation but since the tape has suffered. Fridays volume was the largest since September 21st, the day after the Fed hiked rates. Much of this was due to a large sell order but these large orders can also dictate sentiment for a few sessions. A key read on inflation is due out with PPI at 7:30 am CT this morning; a miss here would reinvigorate the bull camp. St. Louis Fed President Bullard speaks ahead of it at 7:15 am CT. The ECB panel continues through the morning. New Atlanta Fed President Bostic speaks at 12:05 pm CT and the week is only getting started.

Technicals: We discussed the significance of major four-star support and though yesterdays tape began to consolidate, renewed weakness is pressing into this level once again. We have now begun to Neutralize our bias. We remain long term bullish but must also be aware of the market pulse. We are now Neutral/Bullish and if PPI comes in better than expected, we would suggest that longs still holding on get out of the way for a few rounds.

Bias: Neutral/Bullish

Resistance 1280.5-1281.6**, 1291.3-1292.9**, 1298.4-1300**, 1308.4-1312.6**

Support 1262.8-1270.6***, 1243.6*

Natural Gas (December)

Yesterdays close: Settled down at 3.167

Fundamentals: The colder weather is here and New York is now flirting with freezing temperatures. Natural Gas is in a consolidation phase until there is further proof that stockpiles were drawn down and to what degree after price action got a little ahead of itself last week.

Technicals: Price action is under pressure this morning trading losing as much as 8 cents overnight. First key support is holding at 3.08 but we expect the consolidation to continue and the chart is technically damaged in the very immediate term (a session or two). We now look for key support at 3.035-3.051 to play a big role in fixing the tape off a consolidation. If the bears take it below gap support at 2.984-2.998 then we have a near term failure on our hands.


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 12420

Fundamentals: Data out of Europe didnt surprise much this morning and was for the most part in-line with expectations. Furthermore, neither has the ECB panel as central bank heads have more or less discussed support for their actions. Prices have sold off ahead of U.S (and global) inflation data this week which begins today with PPI at 7:30 am CT. Though the action could be attributed more to the likeliness that tax-reform gets figured out, todays PPI data and tomorrows CPI remain a clear wildcard and poor reads here will reinvigorate a weak tape. However, a surprise beat will work this market below 124 and retest the lows from earlier this year.

Technicals: Price action has clung to the 12419 level though it traded to a low of 12416 overnight before consolidating higher ahead of PPI. The technicals will be at the mercy of the data over the next two sessions. However, this is where the settlements become key in the momentum trade.


Resistance 12431-125015**, 12519**, 125255**, 12601**, 12615***

Support 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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