Daily markets morning round-up: E-mini S&P, gold, crude & Treasuries

E-mini S&P (March)

Yesterday’s close (Monday, Jan. 8): U.S. Equity markets are edging higher after a more or less quiet overnight session. The Nasdaq, as we have discussed, is leading the way and nearing our target of 6707. Nikkei futures are .5% lower after the BoJ announced last night it will trim bond purchases for durations over 10 years. Friday will be crucial for the S&P 500 as it marks an official start of earnings season with JP Morgan and Wells Fargo set to release. This morning we have JOLTs Job Openings data while the Dollar Index works off the lowest level since September in a consolidation phase. Fed speak yesterday didn’t necessarily give the Dollar reason to jump and we attribute this move to technicals. Fed dissenter, Minnesota Fed President Neel Kashkari, speaks today at 9:00 am CT, the same time JOLTs will be released. Commodity prices put in a strong 2017 but an even stronger 4th quarter. Chinese CPI and PPI data tonight will be a key read; Energies and Basic Materials have been a strong component for the S&P. 

Technicals: Yesterday’s early drop proved to be short-lived and ultimately didn’t give us the buying opportunity we wanted at 2728.75-2730... Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary levels and bias. 


Crude Oil (March)

Yesterday’s close: Settled at 61.73

FundamentalsCrude spiked early in the overnight session to mark the highest since May 2015. However, it failed that May high and our key resistance by 2 cents. Taking that level out would put crude at the highest since the collapse in December 2014. Shorts are anxious ahead of inventory data this week, and for good reason, the EIA is expected to report its eighth straight drawdown in Crude. With early expectations of -4.1 mb, this would be the sixth week in a row with a draw of at least 4 mb. API data is due out at 3:30 pm CT. Production was somewhat stagnant at the end of the year and has helped support prices. This comes at a time when OPEC compliance has been top notch and is now coupled with worries that Iran could see fresh sanctions keeping their Crude off the market. Yes, we do see value in selling up here over the long haul. We are nearing a period where inventories seasonally build, and this coupled with our belief that rigs will come back online and translate directly into production allows us to believe that there is in fact value in selling at this level over the long haul. 

Technicals: Yesterday’s settlement stayed below the 61.79 level we pointed to, but price action has not. Last night’s spike to a high of 62.56 was a knee jerk move and price action has stayed below R2 at 62.21 for much of the time. Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary levels and bias. 
 

Gold (February)

Yesterday’s close: Settled at 1320.4

Fundamentals: The Dollar has strengthened from its lowest level since September putting slight pressure on gold to start the week. Regardless, the metal has remained very constructive and its ok to go through a healthy consolidation phase. Today at 9:00 am CT, JOLT Job Openings data is due and Neel Kashkari, the Fed dissenter is due to speak. Today will be a good test for the metal after Japan announced last night that they will trim bond purchases for durations over 10 years. The Yen is higher on the session, but this is an act of tightening. We expect Gold to take this in stride and hold well as the week sets up for reads on inflation Thursday and Friday. 

Technicals: Gold is hugging the key 1317-1317.2 level into this morning after a test down to S2 overnight. Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary levels and bias. 
 

Natural Gas (February)

Yesterday’s close: Settled at 2.835

Fundamentals: Natural gas is working to recover from yet another bloodbath. Though we are expected to see a little relief from recent cold temperatures, drawdown expectations over the next three weeks are holding steady and this has reinvigorated the bull camp. This week’s draw is expected to be a record and in the range of -330/-345.

Technicals: There was a significant amount of damage done to the chart late last week and price action trading back through 2.88-2.887 is attempting repair that. Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary levels and bias. 
 

10-year (March)

Yesterday’s close: Settled at 123’155

Fundamentals: Overnight the 10-year traded to key support and the lowest level since December 2016 after the Bank of Japan announced they will trim bond purchases for durations over 10-years. The yen is seeing strength into this morning and this is the sort of exit from Japan that we have been looking for if you have been following our forex Rundown. Still, we do not believe the move lower in the treasury market is sustainable but for now, in the immediate term, the path of least resistance might be lower. JOLT Job Openings is due at 9:00 am CT and Minnesota Fed President Neel Kashkari is also due to speak then. PPI and CPI are due Thursday and Friday and weak reads here will help this market recover firmly. 

Technicals: What was attempting to be constructive price action early yesterday, dissipated throughout the session as equity markets recovered back to all-time highs. Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary levels and bias.