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Whats Moving - Blue Line Morning Express

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Morning Express

As you know, our whole report goes out each morning to clients and Free Trial subscribers berfore 7:00 am CT. Enjoy our Fundamnetals below. But please register for a Free Trial of 1 or all 5 of of our Blue Line Express daily commodity reports in order to get all of our great insight; Techinicals, Fundamenals, and proprietary Bias and Levels. E-mini S&P, Crude, Gold, Natural Gas and the 10-year.

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E-mini S&P (September)

Yesterdays close:Settled at 2905.25, up 16.75

Fundamentals:We have said this before and we will say it again, the Federal Reserve is in the drivers seat. Major U.S benchmarks notched terrific sessions yesterday with the NQ gaining more than 1% after the pace of CPI growth for the month of August softened from July. We have been sounding the horn all week on how critical this read was coming on the heels of last Fridays wage growth beat. Whats important to know is that the Fed is expected to hike in September and barring an unforeseen circumstance December is also a forgone conclusion. What would an unforeseen circumstance be? Well, a complete fallout on the international trade front and this is why we have said for months that the trade dispute has actually been a supportive factor for equity markets at times. However, this third wave worth $200 billion in tariffs on Chinese goods is concerning as we believe it to be the official start of a trade war. Ultimately, after the Fed hikes twice more this year, they are expected to hike two or three times next year as their hiking cycle peaks. On the other end of unforeseen circumstances is if inflation runs hot. This would force the Fed to move at a faster pace, hypothetically, to hike in January. For this reason, inflation data was ever-critical coming on the heels of wage growth poking its head above +0.3% for the first time since December. Therefore, traders, as we expected, used yesterdays soft CPI data as a reason to buy. Furthermore, a tweet from President Trump that implied no rush to make a deal with China was only a minor hurdle on the session

Today, Retail Sales is due at 7:30 am CT. In July, earnings, confidence and Retail Sales showed that the consumer is alive and well. Todays read along with a fresh look at September Michigan Consumer Confidence will go a long way in continuing to confirm such; beats should open the door for higher price action and a test to 2924.50 today.

Technicals:Price action is now out above 2897.50-2900.50, a level we said yesterday that would lead to the next bull-leg higher. This is playing out with the S&P above the 2906.25 level, an area that has continuously exhausted rally attempts. Our near-term momentum indicators are rising this morning to ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Crude Oil (October)

Yesterdays close:Settled at 68.59, down 1.78

Fundamentals:Crude Oil came back in yesterday. The selling below the $70 mark began to hit the tape just about the same time Hurricane Florence was downgraded to a Category 2. Ironic? Maybe. The selling also came as fears of two other storms heading towards the Gulf began to dissipate.As we discussed in an interview with Yahoo Finance yesterday, Hurricane Florence will most likely have a bearish effect on Crude Oil.However, Crude Oil often takes on a premium at the onset of a storm which is the height of uncertainty. Lets not forget though that Wednesdays EIA inventory report was actually bearish with a composite read being of a larger build than expected. Furthermore, a strong technical band of resistance near $71 rejected the rally attempt. For now, Crude Oil is in price discovery mode and while we remain long-term bullish the near-term swings fundamentally and technically will be tougher to predict.

Technicals:Price action is stabilizing above our major three-star support and this will be key heading into the weekend. However, as we discussed here yesterday, Crude Oil has overshot support each time it pulls back due to the overcrowded long trade. For this reason, traders and buyers must be prepared to see a move near ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Gold (December)

Yesterdays close:Settled at 1208.2, down 2.7

Fundamentals:Gold traded to a high of 1218, the highest since August 28th. A soft read on CPI and a strong Euro following the ECB meeting was exactly what Gold needed. However, a tweet from President Trump saying that the U.S has no need to rush to make a deal with China, reversed gains on the session. While this did not send the Dollar Index higher, it stopped did stop its bleeding, the effects were seen more so in the weakening of the Chinese Yuan. The Yuan remains a critical part the Gold trade and Gold cannot extend gains until the Yuan is on the same page. Today, we look to Retail Sales at 7:30 am CT and the freshest of data points, the first look at September Michigan Consumer Sentiment. Data last month showed that the consumer is alive and well, any faltering today would subdue the Dollar and act as a tailwind for Gold (barring negative news on trade, of course).

Technicals:The constructive consolidation continues as Gold tested and failed to hold ground near major three-star resistance at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

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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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