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What to look for in this weeks trade


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E-mini S&P (December)

Last weeks close:Traded to 2603 and settled at a new all-time high of 2601on Friday.

Fundamentals:The market legged fresh all-time highs to finish last week on strong BlackFridaysales with Amazon gaining 2.5% and adding another .5% in todays pre-market. Price action brushed off weakness in China, trading to a low of 2596.50 early in the session before turning higher. New Home Sales data is due at9:00 am CTand today could be on the quieter side as traders gear up for a big daytomorrow. President Trump is scheduled to address Senate Republicans on tax-reform at their luncheontomorrow, this could lay the groundwork for a vote in the Senate this week. The next Fed Chair Powell speaks in front of the Senate Banking Committee as his confirmation hearing begins; we will get a glimpse on his plans for the Fed. Goods Trade Balance and Wholesale Inventories are due out at7:30 am CTtomorrow, Case Shiller at8:00 am CTand Consumer Confidence at9:00. Treasury Secretary Mnuchin speaks along with the Feds Dudley and Harker.

Technicals:Price action has extended gains this morning and last weeks breakout above 2594.50-2596 signals the next bull leg higher to 2633.50. The overnight pullback to 2596 held support beautifully and gives the bulls a clear edge to start the week. We expect price action to drift higher intotomorrow.

Bias:Bullish

Resistance 2616**, 2633.50***

Pivot - 2600

Support 2594.50-2596**, 2585.75-2589.50**, 2576.50**, 2567.75*, 2561.75-2562.25**, 2555*, 2539.25-2543***

Crude Oil (January)

Last weeks close:Traded to a high of 59.05 and settled at 58.95

Fundamentals:This week is all about OPEC withThursdaysmeeting in the crosshairs. Russian Energy Minister Novak has implied that Russia is on board with extending cuts, but this will be a key talking point throughout the week. Given the recent rally and the positioning from the bull camp, the market is pricing in perfection from this deal; lauded support for nine months to finish out 2018. Anything less could cause a mass exodus from the growing long position. We have been very bullish and vocally such. With our upside target being achieved we have come out of the weekend Neutral. We favor positioning short with options, contact us at312-278-0500to discuss strategies.

Technicals:Price action has softened up a little this morning and first support comes in at 58.09-58.14; if the market stays above here the bulls will remain in the drivers seat, however, a settle below here will begin to neutralize the tape. The key level this week to watch will be 56.94-57.02 and a move below here could easily spark further selling down to the line in the sand $55 mark.

Bias:Neutral

Resistance 58.97***, 59.96***, 62.58**

Support 58.09-58.14**, 57.50**, 56.94-57.02**, 56.54*, 55.00-55.25***

Gold (December)

Last weeks close:Settled at 1287.3

Note:Traders want to begin using February Gold bytomorrow.

Fundamentals:Gold has continued to capitalize off a weaker Dollar, however, the gains have been subdued. The Dollar has lost 2.5% since its peak earlier this month and is now at the lowest level sinceSeptember 26th. Gold on the other hand is about 1% lower fromSeptember 26thbut ultimately range bound between 1270 and 1300. Prospects of stronger global growth, daily all-time highs in equity markets and a more hawkish ECB has worked to keep rallies in check. What it comes down to is the need for a catalyst. Do not get us wrong, Gold has traded in a very constructive manner, and we remain bullish. This will be a very interesting week with New Homes Sales due today at9:00 am CT. However,tomorrowis jammed packed with speak from President Trump and next Fed Chair Powell as well as data that includes Consumer Confidence.

Technicals:Price action turned north this morning after holding first support and has now edged out first resistance at 1293.7. Strong three-star resistance comes in at 1298.4-1300 and this will be the key level that the metal must close out above in order to squeeze shorts and attract fresh buying. The chart remains extremely constructive and we have strong expectations for Gold in the first quarter, please contact us to see how we are positioning with options.

Bias:Bullish

Resistance 1293.7**, 1298.4-1300***, 1308.4-1312.6**

Support 1285.1-1286.2**, 1272.4***, 1267-1268**, 1262.8-1263.8**,1243.6*

Natural Gas (January)

Last weeks close:Lost more than 4%on Fridaysettling at 2.916

Fundamentals:Fridaywas a bloodbath for Natural Gas and the selling pressure was exacerbated ahead of the weekend.Sundaysreopen brought a much-needed relief as the gap higher regained critical three-star support. With warmer and more moderate temperatures on the horizon, the bears were in the drivers seat, but as we said they have essentially begun to price-out an actual winter. Our bet is that they will get caught offsides and last night was a sneak peak of what can potentially happen as weather models shifted once again and colder fronts are on their way.

Technicals:Lighter volume (see December) and the contract roll added to an already heavy week. Price action has regained the major three-star level at 2.981 and this will be critical to watch through the end of todays session. Gap support now comes in at 2.929 and a close below here will add fuel to the downtrend. Resistance now comes in at 3.036-3.059 and the bulls must achieve a close out above here in order to neutralize weakness.

Bias:Neutral/Bullish

Resistance 3.036-3.059**, 3.10-3.12**, 3.21-3.25**, 3.321-3.36****

Support 2.981***, 2.929**, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

10-year (December)

Last weeks close:Settled at 12431

Fundamentals:The 10-year treasury is holding well and battling a tug of war between equity bulls and what appears to be a more dovish Fed. Last week was a very interesting trade as the curve flattened significantly which has ultimately opened the door for a reversal higher. This is going to be a very interesting week and we have an auction for 2s and 5s today and one for 7stomorrow. New Home Sales is due at9:00 am CTtoday andtomorrowbrings the heat as tax-reform comes back into the picture with President Trump addressing Senate Republicans and the beginning of confirmation hearings for the next Fed Chair Powell.

Technicals:Resistance at the 125015-12503 level has kept price action in check and this will continue to be a critical level on a closing basis; a close above here will likely gravitate price action higher. To the downside we are watching minor support at 124275 as the level could become stronger through the end of todays session.

Bias:Neutral/Bullish

Resistance 125015-12503**, 12507*, 12519**, 125255**, 12601**, 12615***

Support 124275*, 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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