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E-mini S&P (March)

Yesterdays close:Settled at 3357.50, up 4.50

Fundamentals:U.S benchmarks have firmed through the overnight and are eyeing a fresh wave of record highs. Gyrations at elevated levels are to be expected, therefore, we will not attempt to justify yesterdays mild downtick and instead reiterate this market could drop a healthy 3-5% within any given 48-hour window. Why is the tape moving back north? Thats the easy part. At the first of his two-day Congressional testimony, Fed Chair Powell did not waver from the committees patient policy approach which he called appropriate. It was also noted the Fed will continue implementing a technical measure, otherwise known as intervening in the repo market by adding massive amounts of liquidity, through the second quarter. With rates at or near record lows coupled with these liquidity injections, there is no reason to believe risk-assets fall into a correction mode. However, traders must prepare for those daily gyrations.

The two dominating headlines remain Coronavirus and the 2020 election. Although a slower pace of infections has been lauded by Chinese officials, it is also the byproduct of not classifying a positive test as positive unless symptoms are present. A carrier can be infected for two to three weeks before showing symptoms. On the election front, Bernie Sanders won the New Hampshire primary. Given our previous discussion that Wall Street does not like Sanders, one may wonder why the market has failed to react negatively. New statistics show the better Sanders odds become to take the nomination, the better President Trumps odds become for reelection. Markets love President Trump.

Data from the Eurozone this morning showed an expected dive in Industrial Production which follows the German read last week. Philadelphia Fed President Harker, a 2020 voter, speaks at 7:30 am CT. Fed Chair Powell begins day two at 9:00 am CT. Energy inventory data from the EIA is due at 9:30 am CT and there is a 10-year Note auction at noon.

Technicals:The S&P and NQ are snapping back from yesterdays mild downtick into the close. That swing brings a floor that defines the immediacy of this latest leg. Major three-star support in the S&P comes in at ...Please sign up to receive our entire technical outlook, actionable bias and proprietary levels emailed to you each day.

Crude Oil (March)

Yesterdays close:Settled at 49.94, up 0.37

Fundamentals:OPEC slashed global 2020 Oil demand growth by 230,000 bpd to just 990,000 bpd. Despite the news, Crude Oil has forged higher on the session. For all intents and purposes this was fully expected and justifies Saudi Arabias push for a unified production cut of 600,000 bpd. Data showed voluntary cuts by the Kingdom of 411,000 bpd. Of course, some of this had already been incurred due outages and their production actually rose by 154,000 bpd in January. Some may argue Saudi Arabia has set an example by being over-complaint, but the concern lies within how much slack they give others such as Russia before expecting the same.

Crude Oil largely shook off yesterdays API report, but at the same time one could suggest yesterdays rally dissipated as the session unfolded due to such expectations. The private survey reported +6.0 mb Crude, +1.1 mb Gasoline and -2.3 mb Distillates. Todays official expectations are for +2.987 mb Crude, +0.546 mb Gasoline and -0.557 mb Distillates. API certainly set a bar but given the muted reaction we advise paying more attention to the data relative to the EIA expectations.

Technicals:Crude Oil has traded firm at the onset of U.S hours before dissipating quite a few times in recent days and weeks. Still, price action not chew through strong support in the $49 region once again yesterday and on a technical basis this is a relief rally after a rejection. The bulls have an edge above ...Please sign up to receive our entire technical outlook, actionable bias and proprietary levels emailed to you each day.

Gold (April)

Yesterdays close:Settled at 1570.1, down 9.4

Fundamentals:Gold is on its back foot along with safe-haven assets as equities and the Dollar remain at their upper-ends. Fed Chair Powell exuded patience as he said the current policy stance is appropriate. However, it would seem that risk-assets in the end may have benefited more from comments on the Feds accommodation than Gold. Fed Chair Powell gives day two of his Congressional testimony at 9:00 am CT. Philadelphia Fed President Harker, a 2020 voter, speaks at 7:30 am CT and there is a 10-year Note auction at noon. The economic calendar picks up tomorrow with CPI and Friday with Retail Sales.

Technicals:Although we have it as key resistance since last weeks fallout, we noted strong resistance at 1578.2 is the level bulls must achieve a close above in order to reinvigorate the immediacy of this bull market. Unfortunately, for the bulls Gold continues to struggle at that level and now our momentum indicator comes in at ...Please sign up to receive 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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