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E-mini S&P (December)

Last weeks close:Settled at 3451.75, up 2.50 on Friday and down 10.50 on the week

NQ, yesterdays close:Settled at 11,663.50, up 13.75 on Friday and down 134.50 on Friday

Fundamentals:U.S. benchmarks are on their backfoot to start the week as the risk-appetite recedes due to deadlock in Washington, virus resurgence and a gloomy earnings outlook. With the election a week from tomorrow, hopes of a Coronavirus Aid bill have all but vanished. Still, the posturing continues, and the White House is expected to deliver a counter to the House today. Another record surge in new Covid-19 cases in the U.S. was reported over the weekend. State and local governments have moved to expand restrictions on bars and restaurants to contain the spread of the virus. The picture is worsening in Europe as France registered more than 50,000 cases Sunday, Spain declared a state of emergency, top officials in Poland tested positive and Italy expanded restrictions.

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Data from Germany this morning beared the burden of the deteriorating conditions. German Ifo Business Climate, a read that measures expectations over the next six months, came in shy of expectations. On the bright side, the Current Assessment, which measures current conditions, notched expectations.

September Chicago PMI was in positive territory for the fifth straight month. It also incurred the fourth consecutive positive revision. New Home Sales are due at 9:00 am CT, Dallas Fed Manufacturing at 9:30 am CT and there is a 5-year Note auction at noon CT.

On the earnings front, SAP is down more than 20%. The German multinational enterprise software giant cut forecasts and issued a warning due to lockdowns and the expected impact on its business in the first half of 2021. It noted that customers are prolonging investment and decision making due to the pandemic. Salesforce, a favorite of ours at Blue Line Capital, is feeling the shockwaves and down more than 2% this morning. Hasbro, the toy and board game company, is also down 3% premarket after an unenthusiastic earnings report this morning. After the bell reports include NXP Semiconductors and Twilio.

Lastly, U.S. and China relations are quietly in the spotlight after China announced sanctions on U.S. defense companies, including Boeing and Lockheed Martin, due to arms sales to Taiwan.

Technicals:Price action is under pressure at the onset of U.S. hours. Despite a solid session on Friday, both the S&P and NQ could not close out above first resistance levels; this is our key resistance pocket in the S&P at 3455.75-3462.25 and major three-star resistance in the NQ at 11,750-11,789. The weakness has dragged down our momentum indicators, aligning to create our Pivots and a crucial battleground on the session at 3431.75-3437.50 in the S&P and 11,615-11,665 in the NQ. The good news is that our major three-star supports at 3406.75-3410 in the S&P and 11,539-11,574 in the NQ have held, but a break and close below these will encourage added selling and likely break the near to intermediate-term bullish technical landscape. The bulls must regain the Pivots through the morning in order to work to neutralize this poor start to the week.

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Resistance: 3455.75-3462.25**, 3471.75**, 3488-3494**, 3508.50**, 3524.75**, 3532.75***

Pivot: 3431.75-3437.50

Support: 3406.75-3410***, 3369.50**, 3353.25***, 3329-3330.50***

NQ (December)

Resistance: 11,750-11,789***, 11,860-11,876**, 11,950-11,974***, 12,094**, 12,225-11,249***, 12,397-12,465***

Pivot: 11,615-11,665

Support: 11,539-11,574***, 11,454**, 11,266-11,273***, 11,167-11,197**

Crude Oil (December)

Last weeks close:Settled at 39.85, down 0.79 on Friday and 1.27 on the week

Fundamentals:Washingtons ongoing deadlock on stimulus negotiations as Covid-19 cases top records in the U.S. and Europe has weighed significantly on the energy space. However, the major driver for Fridays bludgeoning was the news of a ceasefire in Libya and the anticipation of added supply during a time where demand is perceived to soften. OPEC is certainly under the spotlight as the cartel plans to ease production cuts by 2 mbpd beginning January 1st. We believe it to be highly likely a production cut taper is delayed. In the meantime, the broader risk-environment and its shaky footing due to Covid-19s second wave must be closely monitored.

Technicals:After a low of 39.57 on Friday again held our major three-star support at 39.33-39.36, price action sliced through the marker overnight forcing us to Neutralize our cautiously Bullish Bias for the time being. We have aligned the sessions low with our 38.76 level to bring first key support. Our momentum indicator is trailing the tape and catching up with 39.33-39.36; a close above here today is needed to neutralize this weakness and avoid added selling into tomorrow.

Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed directly eachmorning.


Resistance: 40.46**, 40.98**, 41.50-41.74***, 42.02**, 43.56-44.33****

Pivot: 39.33-39.36***

Support: 38.42-38.76**, 38.06*, 36.93-37.06****, 34.82***

Gold (December)

Last weeks close:Settled at 1905.2, down 0.6 and down 1.2

Fundamentals:Gold held ground on Friday and that was about it. The U.S. Dollar has worked higher from last Wednesdays low and this has certainly suppressed Gold and other commodities. During that time, the Chinese Yuan has lost 1% against the U.S. Dollar. Overall, we have not expected much from Gold ahead of the election and really do not until December. This is a very soft time of year seasonally and merely holding ground such that it is, would be a win. Although the resurgence in Covid-19 cases brings demand for safe-havens, equal headwinds for the metal come with deflation fears. A near-term rally hangs in the balance of Washington not only passing fiscal stimulus, but meeting or exceeding the expectations of such.

Technicals:Price action has repaired well after a washout shortly after the reopen last night. Second support, a key level at 1894.6-1896.6, withstood an overnight battle and now continued action above major three-star support at 1902-1905 which aligns with our momentum indicator will help lay healthy groundwork for a construction.

Please sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed directly eachmorning.


Resistance: 1915-1917**, 1933-1937***, 1950-1958***

Support: 1902-1905***, 1894.6-1896.6**, 1877.1-1880***, 1866.3*, 1851**, 1845.4****, 1829.8***

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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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