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Morning Express - Blue Line Futures

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E-mini S&P (September)

Yesterdays close:Settled at 2985, down 22.00

Fundamentals:U.S benchmark finished lower yesterday, a day after President Trump poured cold water over trade hopes. One topic at our trade desk yesterday morning was the resilience in U.S Treasuries ahead of U.S hours, as if they were the canary in the coal mine for a weak session to come. Housing data also underwhelmed, and it seemed to set a tone after the bell. Generally speaking, bad housing data raises recessionary concerns. After a substantial run since the June 3rd bottom to record highs and out above 3000 since, price action is/was due for a breather and this is why we began Neutralizing our Bullish Bias.

Odds are mounting for the Fed to cut 50 basis points later this month, hitting a high above 36% this morning. This certainly tells the story of the U.S 10-year Note yield which cannot keep its distance from 2%. Today, we look to Philly Fed Manufacturing. Remember, manufacturing beginning with June ISM on July 1st was less-worse followed by Manufacturing Payrolls for June which were surprisingly strong. On Monday, fresh July NY Empire State Manufacturing bounced back solidly from a dismal June read. One thing we are on the lookout for is peak bad news is good news. We believe that this market wants to see a healthy Philly Fed number today in order to begin paring yesterdays losses. Atlanta Fed President Bostic speaks at 8:30 am CT but NY Fed President Williams will be watched much more closely at 1:15 pm CT.

As we dive into earning season, led by the banks, the XLF lost 0.89% yesterday although Bank of America who reported ahead of the bell gained 0.69%. JPMorgan and Goldman Sachs who reported Tuesday led the march lower. Morgan Stanley is down nearly 1% premarket after reporting beats this morning. The NQ is doing a fine job of ignoring Netflix which missed earnings after the bell and is down more than 10% premarket. IBM is also down about 1% after reporting. Honeywell, UnitedHealth and others report ahead of the bell today and Microsoft will lead after the close.

Technicals:Price action in the S&P began slipping when a trend line from the June 27th low was decisively taken out, this aligned with our major three-star support at 3004-3006. A poor finish yesterday has been buoyed overnight and ultimately the settlement prices in both the S&P and NQ were not below our next crucial levels of 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 (September)

Yesterdays close:Settled at 56.92, down 0.82

Fundamentals:Crude Oil is trying its best to hold ground near a crucial level of support. August options expired yesterday, and September is now front month. Yesterdays EIA report was bearish and weighed on an already soft tape due to rising trade war fears. Although the headline draw of 3.116 mb of Crude was more than expected, much larger builds of Gasoline and Distillates than expected more than offset the headline. Keeping a bid under prices early today was news that Irans Revolutionary Guard seized a foreign oil tanker claiming it was smuggling 1 million liters of fuel. Tensions remain high surrounding Iran and the countrys Foreign Minister has threatened to close the Straits of Hormuz. We expect Crude to trade in a choppy pattern through today, but if it can hold a technically constructive landscape, we imagine theres reason for buyers to step in ahead of the weekend.

Technicals:Amidst weakness late in the session, price action held 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.

Gold (August)

Yesterdays close:Settled at 1423.3, up 12.1

Fundamentals:Silver achieved $16 for first time since February and its finally doing some of the heavy lifting for the precious metal complex. Silver severely lagged Golds June rally and now that Gold is consolidating, it needs Silver to keep buyers on board. Today is a perfect example; Philly Fed Manufacturing blew out expectations causing the 30-year Bond to lose nearly a point. Gold which was already off its overnight high of 1431.9 (separate technical story) only bounced around in $7 range post-Philly thus far and has arguably held ground extremely well and credit that to Silver. Still, we are not saying everything is in the clear fundamentally or technically simply because of Silver; we have concerns that the Feds rate cut path is too highly priced to reality and this could be a headwind for Gold. For now, for this hour, the precious metals complex is winning the battle. NY Fed President Williams speaks at 1:15 pm CT.

Technicals:Gold remains rangebound and overnight was the fifth and latest failure at our major three-star resistance at 1432.9. Failing to settle out above here has kept our Bias more Neutral than Bullish. After pulling back by more than 1%, it is so far holding a constructive floor in a higher volatility consolidation. First key support comes in 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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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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