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Powell, Lighthizer and Cohen - 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 7:30 am CT. Enjoy our Fundamnetals below. But please register for a Free Trial of 1 or all 4 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 (March)

Yesterdays close:Settled at 2791.50, down 5.50

Fundamentals:U.S benchmarks consolidated through a quieter session than anticipated yesterday given Fed Chair Powells Congressional testimony and the deluge of data. Powell stayed the course exuding patience in digesting the effects of previous rate hikes before jumping to the next. The odds of a March hike are now back to 0% from 5.2% 24 hours ago. He showed concerns for global growth, especially China although U.S growth remains steady. Housing data yesterday was poor but was offset by a recovery in February Consumer Confidence. The S&P intraday never slipped below the battleground that was Fridays settlement, however, a late rally failed, and price action dissipated into the overnight. The CME experienced complications last night and the exchange was halted until 9:45 pm CT.

Fed Chair Powell testifies for the second and final day to the Senate Banking Committee at 9:00 am CT, but he is not the only one before Congress. U.S Trade Representative Lighthizer testifies to the House Ways and Means Committee at 8:00 am CT on trade talks with China and potential auto tariffs on the EU. President Trumps former lawyer Michael Cohen is also in the news testifying before the House Oversight and Reform Committee at 9:00 am CT.

Today, President Trump is expected to meet with North Korean dictator Kim Jong Un in Vietnam where he hopes to take steps in denuclearizing the rogue country. At 9:00 am CT we look to a key read on December Factory Orders and Pending Home Sales. On the earnings front, Chesapeake Energy, Lowes and Best Buy are all up strongly premarket after reporting this morning. Traders should keep an eye on the banks as they began to show some vulnerability yesterday after closing off a new swing high Monday.

Technicals:The door remains open for the bear camp despite the bulls muscling out another midsession move yesterday. We find the S&P vulnerable below the battleground that we have called Fridays settlement at 2791.25. Sustained price action below here should open the door for a healthy move down to major three-star support at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Crude Oil (April)

Yesterdays close:Settled at 55.50, up 0.02

Fundamentals:Crude Oil spiked late yesterday after the private API survey posted -4.2 mb Crude and -3.8 mb of Gasoline, a large draw when a small composite build between the two was expected. The effects of reduced exports from Saudi Arabia and Venezuela coupled with pipeline constraints out of Canada at the onset of a seasonally bullish time of year have clearly begun to trickle into the inventory data. If these API numbers are confirmed by the official EIA report, we are likely to see sustained price action testing last weeks swing high. Production data and levels at Cushing should also be closely watched. As of late yesterday, Crude Oil did not seem to be affected by rising tensions between Pakistan and India. However, this could be quickly changing, and traders must monitor the situation closely. Still, it does not seem that shipping lanes are in the crosshairs, but the mounting tensions seem to be turning worse this AM. Furthermore, India is a large importer of Crude Oil and we could imagine that the weaker Rupee could derail imports if it persists.

Technicals:Crude Oils healthy pullback over the last two sessions ultimately did nothing wrong and never settled below major three-star support at 55.44-55.75. Price action is now testing first key resistance at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Gold (April)

Yesterdays close:Settled at 1328.5, down 1.1

Fundamentals:Gold is trading lower but holding in a tight consolidatory range. Treasury prices are sharply lower today for no foreseeable reason other than stable data out of Europe. German 10-year Bund Yields are up sharply this morning to the highest level in two weeks. Confidence and Climate data from Europe over the last two sessions was much more stable than anticipated and showing a bit of a turn around. However, the Dollar is higher today (after the Euro finished strongly yesterday) and this creates a bit of a double whammy for the metal. On a positive note though, Gold continues to hold ground constructively. Today, we look to the trio of Congressional testimonies from Fed Chair Powell, U.S Trade Representative Lighthizer and President Trumps former lawyer Cohen; all three could have an effect on currencies, yields and thus Gold. At 9:00 am CT we look to a key read on December Factory Orders and Pending Home Sales. We are surprised this morning that the metal has ignored escalating tensions between two nuclear countries; Pakistan and India. Keep an ear to the ground.

Technicals:Gold struggled to hold resistance at 1331.1-1332.5 and finds itself again testing major three-star support at 1321.7-1323.4, a level in which it has bounced twice in the last week. Although we remain unequivocally bullish Gold as long as it settles above ....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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