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E-mini S&P (December)

Yesterdays close:Settled at 2582, regaining losses fromFridayandSundaynight.

Fundamentals:The bulls have the edge as equity markets around the world are higher this morning with Asia leading the way. Hong Kongs Hang Seng is up almost 2% and being led by Tencent. Despite a lower open and the political uncertainty, the DAX is up about .5% this morning and the Euro has stalled its biggest decline in a month. Comments from the ECB that they will only make small policy adjustments in the next year have likely buoyed markets in the region. Coeure speaks this morning at9:00 am CT. Merkel is said to give parties the next three weeks to form a coalition. The S&P is on the path it began yesterday, grinding higher. Chicago Fed National Activity is due at7:30 am CTand Existing Home Sales at9:00. We look to a speech from Janet Yellen at5:00 pm CTfor clues on the priced in December hike.

Technicals:Price action has traded through resistance at 2585.75 and testingThursdayshigh. Yesterday put in a solid higher low against last weeks pull back and the bulls have the clear edge. Resistance comes in at the all-time highs and 2596; a close out above here could ignite the path to the next major upside target at 2633.50. First, we must see price action hold above resistance at the 2585.75 level.


Resistance 2585.75**. 2594.50-2596**, 2600*, 2616**, 2633.50***

Support 2582*, 2576.50**, 2567.75*, 2561.75-2562.25**, 2555*, 2539.25-2543***

Crude Oil (January)

Yesterdays close:Traded more than 1% off the low to settle at 56.42.

Fundamentals:Traders ready for inventories to come into the picture today and early estimates are for a draw of 2.1 mbon WednesdaysEIA report. Early weakness yesterday was due to comments from Russia as they eluded to not having decided on extending production cuts. We feel certain they will join, but are giving the Saudis some gamesmanship ahead of the next weeks meeting. We remain bullish into this but are preparing for the potential buy the rumor sell the fact trade.

Technicals:The tape pulled back to S2 yesterday before paring much of its losses and finishing above S1. Price action is hugging the 56.57 level while stalling against resistance at 56.71-56.94, a level in which the trade must get out above in order to attract fresh buying.


Resistance 56.71-56.94**, 57.92-58.14**, 58.97***

Pivot 56.57

Support 56.19**, 55.74**, 55.00-55.25***, 54.36-54.65**, 53.96**, 53.11-53.27***

Gold (December)

Yesterdays close:Lost more than $20 on the session settling at 1275.3

Fundamentals:Gold got clobbered yesterday and though the initial appearance in the currency market was Euro weakness, we believe much of it was Dollar strength. Yields were higher, and the safe haven metal was liquidated, something that would not have happened in heightened political fear in Germany. It is interesting to note that some of the reaction in this regard could be attributed to Fed Chair Janet Yellen giving here letter of resignation to take effect upon the swearing in of Powell. Though it was unlikely she would stick around after the demotion, this now assures that her dovish voice will not be in the mix next year. Chicago Fed National Activity is due at7:30 am CT, Existing Home Sales at9:00and Janet Yellen speaks at5:00.Tomorrowbrings Durable Goods and FOMC Minutes.

Technicals:Price action rejected the $1300 level and as the tape got weaker the weight of selling picked up. Yesterday was a combination of longs liquidating but also fresh short positioning. Normally, following such a weak session, the tape must bottom out first and this means make a lower low today. The 200-day moving average comes in at 1271.8 and this aligns with a near term trendline that forms from the October 27th low. Though there is support below here, the bulls must maintain a close above three-star support at the 200-dma. A close above first resistance at 1281.1-1283.2 will begin to neutralize this weakness.


Resistance 1281.1-1283.2**, 1289.5-1290**, 1298.4-1300**, 1308.4-1312.6**

Support 1271.8***, 1267**, 1262.8-1263.8**,1243.6*

Natural Gas (December)

Yesterdays close:Lost 5 cents at 3.047

Fundamentals:Prices perked up a little from their slide yesterday on news that Nebraska approved the Keystone Pipeline but ultimately, we find ourselves lower this morning. This has been a slow bleed over the last week as we head intotomorrowsstorage report with the second withdrawal in a row excepted.

Technicals:Natural Gas futures are testing major three-star support head on at 2.984-2998 and we are viewing this as a tremendous intermediate to long term buying opportunity. A close below here will dent our hopes and risk must be managed.


Resistance 3.097**, 3.154-3.175**, 3.198-3.22***, 3.288*, 3.353***, 3.55**, 3.67**

Pivot - 3.035-3.051

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

10-year (December)

Yesterdays close:Lost 7 ticks on the session closing at 12422.

Fundamentals:Sellers came in full force yesterday and there seems to be no concern over the political deadlock in Germans. As we commented with Gold, Yellens resignation confirms the subtraction of her dovish voice at the Fed. The longer end, the 30s are actually higher this morning while the 10s are near unchanged and the 2s and 5s are lower. The yield curve continues to flatten and at a very sharp pace over the last few weeks. Chicago Fed National Activity is due at7:30 am CTwhile Existing Home Sales are due at9:00. Fed Chair Yellen speaks later today at5:00 pm CT.

Technicals:Price action is testing key support at 12416-12419 and a move below here will open the door for another half point of losses. Data will be important today but overall the treasury markets feels to be on a mission and thats lower intotomorrowsFOMC Minutes. The 30-year is about half a point form session highs, still this is something to watch, if it gets out above there it could drag the complex higher on a technical basis.


Resistance 12431-125015**, 12507*, 12519**, 125255**, 12601**, 12615***

Support 12416-12419**, 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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