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Today's Playbook - Blue Line Morning Express


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Morning Express

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E-mini S&P (June)

Yesterdays close:Settled at 2812.25, down 7.25

Fundamentals:U.S benchmarks are edging back to the highs of the week and year on this quadruple witching Friday. The U.S and China trade narrative is a key driver into this morning on news U.S Treasury Secretary Mnuchin, U.S Trade Representative Lighthizer and Chinese Vice Premier Liu He held a call that made significant progress. President Trump added there will be a deal in the coming weeks. There is a stark contrast between these comments and those from the last two days where President Trump emphasized the U.S would not enter a bad deal and the probability of a deal altogether was merely 50/50. Furthermore, on Wednesday, during Lighthizers Congressional Testimony, it came to light that there was still a good distance between the two sides on intellectual property rights, which we have referred to as the true substance. Lastly, it is highly questionable how a deal altogether would be enforceable, and this could become the next hurdle. This jawboning has continued to create a path of least resistance higher and although the market may not even believe it, it seems to believe an accommodative Federal Reserve who is certainly in the drivers seat.

Today is quadruple witching and this means the March contract expires at 8:30 am CT. Equity and ETF options also expire at the bell and this typically brings a wave of volume. In theory, this is a supportive week to price action.

On the economic calendar, we look to March NY Empire State Manufacturing at 7:30 am CT, February Industrial Production at 8:15 am CT. At 9:00 is a fresh look at March Michigan Consumer data and JOLTs Job Openings.

Yesterday, of FAANG, only Apple was in the green, gaining 1.11%. Google, Amazon, Netflix and Facebook were all in the red. Facebook took the biggest hit, down 1.85% and another 1.5% premarket today after the company experienced a widespread outage and two top executives resigned.Bill Baruch joined CNBCs Trading Nation yesterday to take a look at the Netflix chart.Additionally, he covered the social media obsessionSNAP (watch).

Technicals:Price action is sharply higher this morning but there is still overhead resistance. That in the S&P is most imminent coming in 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 58.61, up 0.35

Fundamentals:Crude Oil is pulling back from a new swing high overnight after the IEA released their monthly report. There are a lot of headlines to look at when these Monthly Reports hit the tape from each OPEC, IEA and EIA. Today, we will focus on just one; spare capacity. The IEA made a point to notice that OPECs production cuts have increased spare capacity. Years ago, the Crude Oil market focused much more closely on spare capacity as a price driver. When capacity was tight, Crude went higher. When capacity was cushioned, this would pressure prices. Overall, the tighter the capacity, the more disruption a geopolitical event or outage would have. We look to this weeks price breakout due to pent up technicals, the Saudi cut news and a bullish EIA report as running its course. We are no longer Bullish in Bias on Crude Oil. Lastly, today is options expiration for the April contract and this can cause volatility.

Technicals:Our upside target of major three-star resistance at 59.63 was not achieved but we now believe the price breakout above 57.05-57.35 has run its course and for this reason we are now Neutral in Bias. First key support aligns ...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 1295.1, down 14.2

Fundamentals:Gold is bouncing back from yesterdays poor session and holding the psychological $1300 mark this AM. Weak U.S data from March NY Empire State Manufacturing and February Industrial Production has not added to this mornings strong tape but it seems to be awaiting the results of fresh March Michigan Consumer and January JOLTs Job Openings.Driving price action though is a bounce back in Treasuries and Gold cannot ignore our base-case for being bullish; Bill Baruch covered this topic in an interview with Kitcos Daniela Cambone.

Technicals:We were cautious yesterday morning as we wanted to see Gold hold first key support. It has and is now trading out above the pivot of 1298.1-1299.2 which has gotten us immediate-term Bullish in Bias again. Still, there is strong overhead resistance and a close out 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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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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