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

E-mini S&P 500 (June)

Last week’s close (Friday, April 13): Settled at 2657.25, down 6.75 on Friday and up 51.50 on the week

Fundamentals: U.S. equity markets gapped higher Sunday night with the “Mission Accomplished” rhetoric bringing a calming. The U.S.-led strikes on Syria were done in conjunction with Britain and France and while some hailed the execution as perfect, the market clearly agrees. The question that remains is whether Russia will retaliate. The White House said it plans to announce new sanctions on Russia today and this will be important to keep an eye on; are these more or less a token or are these substantial sanctions? In yesterday’s Tradable Events this Week, we discussed how any weakness on the open would set up a buying opportunity; this never presented itself.

Here we also laid out how pivotal today will be in setting a tone for the rest of the week. Bank of America is due to release earnings this morning. The announcement comes on the heels of solid beats from JP Morgan, Wells Fargo and Citigroup on Friday. Despite the beats, the banking sector experienced a wave of profit-taking. Bank of America will try to help the sector bounce back ahead of Goldman Sachs Tuesday and Morgan Stanley on Wednesday. The attention then will quickly shift to Retail Sales due at 7:30 a.m. Central. This crucial data point has not beaten expectations since November’s read and has contracted the last two months in a row. If these two releases beat this morning and the geopolitical front remains calm, the S&P should be set for a strong session. Also, a lineup of Fed Presidents is scheduled to speak today; Kaplan from Dallas and Kashkari from Minneapolis at 11:00 am CT and Bostic from Atlanta at 12:15 pm CT. Additionally, at 7:30 am CT is NY Empire State Manufacturing. Business Inventories data is at 9:00 am CT. The attention after the bell will shift to tech with Netflix due to release earnings. Lastly, a critical sting of data from China is due; GDP, Industrial Production, Fixed Asset Investment and Retail Sales. 

Technicals: This market remains as technical as they come, from both the short and long time-frames, and we cannot emphasize this enough. Where do we start? The strength of our rare major four-star resistance, Friday’s choppiness that tested retracement levels and volume pockets before failing, or the perfect overnight cover of Sunday’s gap higher. While Friday’s settlement was 2657.25, the electronic session went off at 2659.25; we have first key support at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.


Crude oil (May)

Last week’s close: Settled at 67.39, up .32 on Friday and 5.33 on the week

Fundamentals: Crude oil is trading more than a dollar from its high of 67.74 on Sunday night and 67.76 on Friday. However, it is attempting to stabilize from the overnight low of 66.14. Weakness comes on what is being hailed a well-executed strike on Syria and seemingly a de-escalation of tensions arising from the Syrian-government provoked chemical attack a week ago. While Syria is not a major oil producer, their close ties with both Russia and Iran and the vicinity of the Middle East brought a risk premium to Crude Oil through the week and ahead of the weekend. We discussed on Friday that not only is it imperative to have capitalized on this rally throughout the week but for those who stayed long over the weekend to get out of the way on Sunday night’s open if in fact tensions were deescalated. The coordinated strikes were on Friday night and as stated on yesterday’s Tradable Events this Week, this gave markets the entire weekend to digest the news. The White House said it plans to impose new sanctions on Russia today, this should be watched closely. Additionally, any trade war fears with China will cause additional weakness. Data from China tonight will be critical and includes GDP. Baker Hughes data showed an increase of seven Oil-rigs on Friday. Inventory data will quickly become the focus within 24 hours.

Technicals: Our bias has quickly shifted; however, the next three days could be very choppy given options expiration tomorrow. First, considering the geopolitical premium added last week. Second, the Commitment of Traders.


Gold (June)

Last week’s close: Settled at 1347.9, up 6.0 on Friday at 11.8 on the week

Fundamentals: Gold is holding in well this morning despite a de-escalation of tensions surrounding Syria. The U.S.-led strike in coordination with Britain and France took place Friday night and after markets were closed. Markets had all weekend to digest the strikes and ultimately a mission that was successful has reduced safe-haven demand. Still, the dollar is weaker this morning and Gold is trading about $5 from its low. The White House plans to announce sanction on Russia today and this could be keeping a premium in the trade. Retail Sales data is due at 7:30 a.m. Central. This has been a dismal number; one solid read should not do much to Gold but still something better than expected will weigh on the metal for a little. A lineup of Fed Presidents is scheduled to speak today; Kaplan from Dallas and Kashkari from Minneapolis at 11:00 am CT and Bostic from Atlanta at 12:15 pm CT. Additionally, at 7:30 am CT is NY Empire State Manufacturing. Business Inventories data is at 9:00 am CT. 

Technicals: Price action has been stable coming into this morning. This is nothing new for Gold as it has battled extremely well in the weeks and months leading up. The technicals are about as constructive as the can be.


Natural gas (May)

Last week’s close: Settled at 2.735, up 0.049 on Friday and 0.034 on the week

Fundamentals: We are officially halfway through April and it is snowing in Chicago. The weather continues to be favorable to the bull camp, yet the market remains extremely contained. Given that much of the current conditions are priced in, we could begin to see some fundamental weakness as the week unfolds and the focus again tries to shift to seasonal builds (which hopefully come for the sake of those living in this weather).

Technicals: Though we have remained very Neutral, we took a slight Bullish Bias ahead of the weekend looking for uncertain weather patterns to encourage a premium before Friday’s close. While price action holds firmly out above first key resistance, we do see value in...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
 

10-year Treasuries (June)

Last week’s close: Settled at 121’155, down 0’005 on Friday and down 0’17 on the week

Fundamentals: Treasury prices have been hammered to start the week on reduced geopolitical tensions. The U.S led strike on Syria in conjunction with Britain and France took place after markets were closed and this gave traders the entire weekend to digest such. The Treasury complex was trading lower for much of the week on reduced trade war tension and now taking the geopolitics out of the equation we find things where they are this morning. This is a big Monday with Retail Sales due at 7:30 am CT along with NY Empire State Manufacturing. A lineup of Fed Presidents is scheduled to speak today; Kaplan from Dallas and Kashkari from Minneapolis at 11:00 am CT and Bostic from Atlanta at 12:15 pm CT. Business Inventories data is due at 9:00 am CT.

Technicals: We took a very Neutral approach to close out the week as we saw no edge on the technical weakness and geopolitical uncertainties. Price action is now well below...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.