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Trading the Noise - Blue Line Morning Express

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E-mini S&P (March)

Yesterdays close:Settled at 3288, down 1.75

Fundamentals:Its signing day and U.S benchmarks are holding a shade below record levels. The tape weathered news yesterday that current tariffs wont be rolled back, raising further questions to what is truly being accomplished between the U.S and China in this Phase One trade deal. Ultimately, this truce paves the way for Phase Two and to be honest its genius. Just take a look at what the stock market achieved last year as the trade war evolved into great trade talks and then this deal. It would seem both sides are ready to reproduce this template but potentially leave a bit less uncertainty by signing todays Phase One trade deal. Although details are few and far between, its reported China will commit to buying at least $200 billion in U.S goods and services over the next two years. Current tariffs on $360 billion of Chinese goods will remain in place through Novembers election as a backstop to measure compliance on the substance of the deal such as intellectual property rights. However, as promised, the U.S will cut in half the 15% tariff on about $120 billion of Chinese goods that was imposed on September 1st.

As we dive into earnings season JPMorgan topped estimates yesterday with record results. The story is a bit softer this morning with Goldman Sachs missing and Bank of America underwhelming. Target is stealing some headlines this morning after reporting lower than expected holiday sales, the stock is down more than 7% premarket.

On todays economic calendar we look to U.S PPI and fresh January NY Empire State Manufacturing. Traders should keep a close eye on the manufacturing reads this week as this market must see the sector turn a corner in order to extend gains amid a patient Federal Reserve. We also look to two new 2020 Fed voters speaking, Philadelphia Fed President Harker at 10:00 am CT and Dallas Fed President Kaplan at 11:00 am CT.

Technicals:We have held a Bullish Bias on this latest leg, however, feel the market is reaching some very short-term exhaustion and for this reason we want to dial this down and sit a few rounds. We have key resistance overhead in the S&P at 3295 and above there major three-star resistance brings a ceiling at ...Please sign up at Blue Line Futures to have our research emailed to you each morning.

Crude Oil (February)

Yesterdays close:Settled at 58.23, down 0.15

Fundamentals:Crude Oil saw renewed selling pressure late yesterday after the private API survey showed +1.1 mb Crude, +3.2 mb Gasoline and +6.8 mb Distillates. Price action slipped to a low of 57.84 on this options expiration session before paring losses. The API data was a much larger composite build than what analysts expected from the official EIA report at 9:30 am CT; -0.474 mb Crude, +3.386 mb Gasoline and +1.214 mb Distillates. Through todays session traders also must keep a pulse on the broader risk-environment given that the U.S and China signing the Phase One trade deal will be in the headlines.

Technicals:Price action has remained contained by first key resistance at 58.65, leaving the tape susceptible to waves of selling to chew through major three-star support at ...Please sign up at Blue Line Futures to have our research emailed to you each morning.

Gold (February)

Yesterdays close:Settled at 1544.6, down 6.0

Fundamentals:Gold is moving firmly higher this morning with U.S Dollar weakness and some cold water over the Phase One trade deal lifting the tape. U.S Treasuries are also seeing a steady wave higher this morning, bringing support to the metal. Platinum has surged by more than 3% today and to the highest level since January 2018, signaling a potential end of the most recent wave of profit taking across the metals complex. Silver also tagged $18 after trading to a low of 17.69 yesterday. U.S PPI data was soft this morning, offsetting a marginally better read on NY Empire State Manufacturing. New 2020 Fed voters speak today, Philadelphia Fed President Harker at 10:00 am CT and Dallas Fed President Kaplan at 11:00 am CT. The Fed releases their Beige Book at 1:00 pm CT.

Technicals:Todays move is healthy and works to solidify a near to intermediate-term bottom. Still, we must see a close above first key resistance at ...Please sign up at Blue Line Futures to have our research emailed to you 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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