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

E-mini S&P 500 (June)

Yesterday’s close (Monday, May 7): Settled at 2670 up 7.00

Fundamentals: The S&P 500 is lower this morning after yesterday’s momentum shift. Price action slipped from unchanged at 2:15 a.m. Central, right as Fed Chair Powell spoke at a forum in Switzerland. His emphasis here was that the Fed wants to communicate policy clearly while it normalizes in order to avoid market disruptions. He added that the market is “well aligned” with the Fed’s projections and particularly the Dot Plot. Trade Balance data from China last night was robust and helped equity markets regain footing from yesterday’s green but otherwise disappointing session. Momentum in the low volume grind higher yesterday shifted after President Trump announced he will decide on the Iran Nuclear Deal at 1:00 pm CT today. This announcement as well as competing headlines about the Nuclear Deal sent crude oil more than a dollar from its high and back to unchanged; the quick turn of events in low volume hurt the budding bullish momentum. NFIB Small Business Optimism missed expectations this morning and next we look to JOLTs Job Openings data at 9:00 a.m. Central. As for earnings, we look to Disney after the bell as the highlight of the day. 

Technicals: Price action is lower this morning after failing to hold a test of major three-star resistance. While the settlement stayed above the pivot, the momentum shift in yesterday’s low volume session did not do the bulls any favors in the near term. Our Bias has not shifted, and we ... ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Crude oil (June)

Yesterday’s close: Settled at 70.73, up 1.01

Fundamentals: It is Decision Day. Yesterday, just as crude oil settled above $70 per barrel and at the highest level since November 2014, President Trump tweeted he will announce his decision on the Iran Nuclear Deal today at 1:00 p.m. Central. This announcement coupled with other headlines on the Nuclear Deal quick sent Crude oil about 2% from its high. Price action has remained subdued since. While inventory expectations come into the picture through today, the focus is President Trump’s announcement; does he scrap the deal altogether, does he piece together a new deal, does he stay, what is the reaction from the EU? We may not even have all the answers today. European members have made last ditch efforts to persuade President Trump to stay in the deal, adding they will continue to implement the deal. Furthermore, Iran said it will not renegotiate the deal and will retaliate if it is scrapped. Traders also must keep an eye on the U.S Dollar strength, it has made new swing highs and we maintain it has held Crude back from higher prices in recent weeks. 

Technicals: Yesterday’s volatility played out quickly. On Sunday’s Tradable Events this Week as well as here yesterday, we attempted to hammer home the importance of locking in profits for longs early Monday in order to avoid unexpected volatility and as inventories come into the picture. Price action has hugged first key support.
 

Gold (June)

Yesterday’s close: Settled at 1314.1, down 0.6

Fundamentals: Gold started the week on firm footing but this has slowly dissipated. U.S Dollar strength continues to be the driver and the Dollar Index is trading to a new swing high this morning. Gold saw only little volatility on Fed Chair Powell’s speech at a forum in Switzerland early this morning; there were not surprises. We look to JOLTs Job Openings data at 9:00 am CT. Additionally, President Trump will announce his decision on the Iran Nuclear Deal at 1:00 pm CT. All markets will be on watch for his decision and the details. Iran has said it will not renegotiate the deal and they will retaliate if it is dropped. Geopolitical tensions in the Middle East are heightened; Gold could wake up from its slumber because of this. 

Technicals: Price action in Gold remains subdued, but it is not falling apart. This is a good sign as we stated yesterday, the net-long position has been reduced by 80% from ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
 

Natural gas (June)

Yesterday’s close: Settled at 2.741, up 0.03

Fundamentals: We see one major driver in the fundamentals and that hotter than average temperatures in late June and through July. Therefore, we see tremendous value in the long run as we near 2.50-2.70. Weather in parts of the Midwest heads into the 80’s today. While the northern East Coast is expected to stay in the 70’s over the next 10 days, southern parts will see cooling days in the high 80’s. 

Technicals: Yesterday’s low of 2.695 was the latest test into first key support that held. As we stated yesterday, aggressive bulls can look to...  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)

Yesterday’s close: Settled at 119’22 down 0’005

Fundamentals: Yesterday was the lowest volume day of the year as the U.K was on a bank holiday and as traders awaited Fed Chair Powell to speak at a forum in Switzerland early this morning. The trading range and volume remain tight as he did not surprise with any comments. His emphasis was that the Fed wants to communicate policy clearly while it normalizes in order to avoid market disruptions. He added that the market is “well aligned” with the Fed’s projections and particularly the Dot Plot. There is a 3-year Note auction at noon CT today and President Trump speaks at 1:00 pm CT regarding the Iran Nuclear Deal; both should bring volume back which means today’s settling level will be important.

Technicals: We remain Bullish in Bias though we acknowledge that the downside is susceptible to... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.