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Trading the Noise - Blue Line Morning Express

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E-mini S&P (March)

Yesterdays close:Settled at 3326, up 6.25

Fundamentals:U.S equity benchmarks created a floor at major three-star support on the opening bell yesterday and pared modest losses as the session unfolded. The NQ settled at a fresh record high and extended gains overnight after Intel crushed earnings estimates. Intel is up more than 5% premarket. Earnings have overall been good and there are supportive stories within. Although Comcast lost 3.77% after reporting ahead of the bell yesterday weighing on Fox and Disney, it was Netflix that gained 7.24% following its report Wednesday. Risk-sentiment around the globe is fairly stable to actually strong; European benchmarks are up more than 1% after the U.K posted strong Flash PMI reads and German Manufacturing was less-worse than feared. The Shanghai Composite though did shed 2.75% yesterday as the Coronavirus spread ahead of the start of the Lunar New Year holiday. The virus has now been reported in 32 of 34 Chinese provinces. There is now widespread lockdown and many of the New Year events have been cancelled, it is estimated that this can weigh on GDP by 1 to 1.2%.

American Express beat earnings this morning and we look to U.S Flash PMIs at 8:45 am CT.

Technicals:Price action bottomed on the opening bell yesterday and has not looked back. Major three-star support in the S&P at 3304.75 was nudged but held and the tape never fully tested major three-star support in the NQ at 9128-9133.50 before reversing. The S&P does face major three-star resistance at ...Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day.

Crude Oil (March)

Yesterdays close:Settled at 55.59, down 1.15

Fundamentals:Yesterdays EIA inventory data was not as bearish as some traders and analysts had feared, however, the inability to bounce from what has become oversold conditions across the complex following such exudes the broader weakness. Despite one weeks data that was not as negative as many expected, it does not change a picture that seasonally points to a couple more weeks of builds and furthermore data yesterday that showed a WoW drop in Refinery Crude Runs by 0.116 mbpd. The lower Run Rate means less Crude was drawn to create the products, in hindsight, there could be fear out there that this could stay suppressed for a couple weeks and this has weighed on the tape a bit. Overall though, hurting the energy sector this week has been the spread of the Coronavirus and estimates are now showing that the virus could hit an already vulnerable Chinese GDP by 1 to 1.2%. Flash Manufacturing PMIs were better than feared and this can help create a supportive narrative for the sector if U.S Manufacturing PMI beats.

Technicals:The trend is down, and Crude has lost more than 5.5% this week. Yesterdays low of 54.77 ultimately held major three-star support at 54.85-54.98 and this strong level of support is buoying the tape ahead of U.S PMI data. Still, rally attempts have been contained by major three-star resistance at ...Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day.

Gold (February)

Yesterdays close:Settled at 1565.4, up 8.7

Fundamentals:Gold settled strongly yesterday but began paring some of those gains ahead of the electronic close as equity markets surged and the Dollar was ticking higher. Both equities and the Dollar have continued in those directions and overall stronger than expected Flash PMIs from the U.K and Europe have all weighed on safe-havens such as Treasuries and Gold heading into U.S hours. Keeping a bid under pullbacks in Gold and Treasuries is continued uncertainty as to the spread of the Coronavirus and entire cities being locked down in China. Overall, this is expected to hit not only Chinese growth but global growth and this is a supportive narrative to safe-havens. Standing in Golds way ahead of the weekend are the August highs technically and U.S Flash PMIs fundamentally.

Technicals:Gold is holding a shallow pullback this morning to the 1556 area, a level that the metal surged from yesterday morning; above here is very healthy. Still, major three-star resistance is ...Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day.

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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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