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Today's Playbook - Blue Line Morning Express

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E-mini S&P (December)

Yesterdays close:Settled at 3475.50, down 5.50

NQ, yesterdays close:Settled at 11,874, down 100.25

Fundamentals:U.S. benchmarks rebounded yesterday from crucial levels of technical support. The session low came against our major three-star support at the opening bell and a failure to go lower provided a tailwind for a pivotal intraday recovery despite an unenthusiastic news cycle. The impasse in Washington continues, but U.S. Treasury Secretary Mnuchin and House Speaker Pelosi have provided enough hopium. The White House has shown interest in working with the Democrat-led House, but the Republican-led Senate has refused to agree on a larger price tag and plans to vote on its $500 billion package next week. We maintain our belief that a Coronavirus Aid package will get passed this year, albeit after the election.

On the earnings front, JB Hunt whiffed and the stock is down 7% premarket. This comes amid a steady rise in Transport stocks. In fact, Fed Ex broke out to new record highs yesterday.Bill Baruch covered the sector earlier this week with CNBCs Trading Nation.Kansas City Southern is on deck this morning. Schlumberger is down by 1% ahead of the bell after the oil services company reported an adjusted profit beat and a revenue miss.

Retail Sales is due at 7:30 am CT. The results are expected to be steady gains of 0.5% MoM on the Core read, excluding autos, and +0.7% MoM on the headline print. Industrial Production is due at 8:15 am CT and fresh October Michigan Consumer data is due at 9:00 am CT. Traders want to prepare for a deluge of economic data from China Sunday night that includes Q3 GDP and September Industrial Production.

Technicals:Yesterday, we cited, That despite a negative session yesterday (Wednesday) each (the S&P and NQ) held crucial levels of technical support and this has created an orderly and healthy pullback rather than a panicky one. Still, although Bullish in Bias, we are extremely cautious and a close below major three-star support in the S&P at 3431.75-3437.50 will completely neutralize the latest leg. Guess what? Price action responded to crucial levels of technical support and has steadily climbed into U.S. hours. The S&P is out above major three-star resistance but settling in within the large range after testing and pulling back from first key resistance at 3491.25-3494. Whereas the NQ has tested major three-star resistance at ...Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.

Crude Oil (December)

Yesterdays close:Settled at 41.24, down 0.10

Fundamentals:Crude rebounded well with risk-assets yesterday, but waves of strength continue to fizzle out at overhead technical resistance. Although yesterdays inventory data was very supportive with Crude -3.818 mb, Gasoline -1.626 mb, and Distillates a massive -7.244, all bubble-wrapped with estimated production falling 500,000 bpd. Regulators said yesterday that 24% of oil production in the Gulf is still off-line after the record-breaking storm season. The inability to move higher on the data suggests much of such is already priced in. This means that a resurgence in Covid-19 outbreaks in the U.S. and Europe coupled with zero progress in Washington on the fiscal front are certainly keeping Crude Oil contained below those crucial levels of technical resistance. Still, a broad risk-on move seems very likely and could ultimately be the driver for a technical breakout; traders should keep a pulse on equity indices and other commodities through the close today as they could do the heavy lifting.

**Just in, Retail Sales blowout read is lifting risk-assets**

Technicals:Price action is holding out above a support shelf at 40.40-40.70 that aligns the post-EIA trade and our momentum indicator; steady action above here is very positive. Regardless, we must, must, must see another constructive close. The 50-day moving average at 41.27 is now decisively out above the 200-day at 40.96 and this Golden Cross is ready to bring a tailwind to the tape but we need a breakout confirmation from this range with a close above major three-star resistance at ...Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.

Gold (December)

Yesterdays close:Settled at 1908.9, up 1.6

Fundamentals:Gold is trading firmly out above the $1900 mark and is battling at its 2011 record high in a very constructive long-term manner. A much better read on Retail Sales this morning than expected paves the way for a strong session for risk-assets including Gold, as long as the U.S. Dollar doesnt heat up. Industrial Production is due at 8:15 am CT and fresh October Michigan Consumer data is out at 9:00 am CT. The Chinese Yuan has put together a tremendous week, finishing well off its early 1% loss and now positive. This broadly paves the way higher for commodities and on Sunday night we get a deluge of data from China including Q3 GDP and Industrial Production; a confirmation here is very bullish. Additionally, traders want to keep an ear to the ground for headlines out of Washington that could either hurt or support the metal.

Technicals:Silver responded to trend line support from the September 28th low perfectly yesterday and this helped the sector rebound from early losses. Still, Silver must clear the 50-day moving average and resistance at the $26 area in order to reinvigorate a near-term bullish tape. Despite the steady strength, Gold has struggled to clear first key resistance at 1915-1917. Our momentum indicator has caught up with the tape at 1909, but as long as the metal hangs above here and furthermore major three-star support at ...Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels for the markets you trade emailed 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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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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