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Today's Playbook - Blue Line Morning Express

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E-mini S&P (March)

Yesterdays close:Settled at 3289.75, up 25.00

Fundamentals:U.S benchmarks closed at record levels yesterday and extended gains overnight before settling in ahead of earnings and CPI. JPMorgan kicked off earnings season and crushed estimates, the stock has gained as much as 2% premarket. These Q4 results follow a strong Q3 report on October 15th that surged the stock more than 20% to record levels. Citigroup and Wells Fargo are also due to report ahead of the bell. U.S CPI is released at 7:30 am CT. Inflation has been tepid, and this allows for Federal Reserve patience. We watch the Core read most closely, which excludes food and energy. The MoM results have lingered around the +0.2% benchmark over the last six months while the YoY results have held out above 2% steadily between 2.3% and 2.4%. These ranges would be considered a Goldilocks scenario and supportive to the stock market when coupled with favorable earnings. NY Fed President Williams speaks at 8:00 am CT today.

Overnight, Chinese Trade Balance data came in much stronger than expected. However, the strong gains in both Exports and Imports YoY does elude to a rush to beat potential December 15th tariffs which in turn could hurt January and February results. The trade truce has added a tailwind to the market for a month now and signing day is tomorrow. The Phase One trade deal between the U.S and China is expected to be signed in Washington, but traders may also want to keep a pulse on developments on trade between the U.S and EU. New EU Trade Commissioner Hogan also visits Washington this week to face off with President Trump and U.S Trade Representative Lighthizer.

Technicals:Both the S&P and NQ extended gains overnight with the NQ achieving our next upside target of 9100-9136.50, which we have now broken out and extended (see below). The S&P pinged key resistance at 3295 with a high of 3296.75, but our next major three-star upside target in the S&P comes in above at ...Please sign up for a Free Trial at Blue Line Futures to receive our entire technical outlook, actionable bias and proprietary levels by email each morning.

Crude Oil (February)

Yesterdays close:Settled at 58.06, down 0.52

Fundamentals:Crude Oil traded to a new low last night but was buoyed by Chinas Trade Balance data which showed a 17th straight record year of Crude imports. The broad December data was also very strong and supportive to the risk-environment although it does pose a question for the coming months as purchasers raced to beat potential December 15th tariffs. The data also eludes to the recovery in the industrial sector as seen through recent data. Fresh Industrial Production and Q4 GDP for China are due Thursday evening. For Crude specifically, December imports came in at 10.71 mbpd, although this was below Novembers 11.13, it was still the third highest on record.

Crude Oil and Heating Oil both touched new lows last night, but it was Gasoline that put in a low early yesterday. Early EIA estimates show Gasoline building by 4 mb with Crude and Distillates waffling at the unchanged mark. Traders should keep a pulse on Gasoline through today and with API after the bell.

Technicals:As we discussed in yesterdays Midday Market Minute, there is very strong support at the 58.02-5.35 level. Although Crude traded to a low of 57.72 overnight, this level has worked to stop the bleeding. Our momentum indicator now aligns with this 58.02-58.35 pocks as does yesterdays settlement; continued price action above here will open the door for a relief bounce. Strong resistance sits in two waves well overhead at ...Please sign up for a Free Trial at Blue Line Futures to receive our entire technical outlook, actionable bias and proprietary levels by email each morning.

Gold (February)

Yesterdays close:Settled at 1550.6, down 9.5

Fundamentals:Gold slipped sharply overnight just ahead of the strong Chinese Trade Balance data and as the U.S Dollar continues to strengthen. Still, the Treasury complex is stable and U.S CPI data was in-line with expectations to slightly soft. This is keeping the metal from accumulating further losses while equity markets trek again to fresh record levels. Despite reasons, we noted here early last week that Gold comes out of the December 23rd seasonal buy and typically pares a portion of those gains in the fourth or fifth trading day of the year. This move should not come as a surprise due to such and as the geopolitical risk premium dissipates. NY Fed President Williams speaks at 8:00 am CT

Technicals:We have been noting here that we are keeping a minor Bullish Bias due to our longer-term outlook and the intermediate to longer-term trend. However, we have advised here and through recent TV interviews that we are prepared to see Gold trade as low as the $1500 mark. Strong major three-star support comes in at two levels ...Please sign up for a Free Trial at Blue Line Futures to receive our entire technical outlook, actionable bias and proprietary levels by email each morning.

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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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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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