Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on MoneyShow.com and Midday Video.
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Crude oil is testing the psychologically significant $70 handle, what's next?
E-mini S&P (September)
Wednesday’s close: Settled at 2841.25, up 20.25.
Fundamentals: Wednesday was the definition of what we have been preaching all week. There are many themes playing out but none more important than earnings. The S&P 500 (SPX) and NQ began ripping higher into the close on news that President Trump agreed to suspend implementing tariffs on the EU, most importantly on autos, after meeting with European Commission President Juncker.
The S&P traded to the highest level since January 30 and the NQ set another record. However, the enthusiasm was short-lived after Facebook (FB) disappointed on the earnings front and signaled it expected growth to slow through the end of the year; it is down 20% premarket this morning.
Despite the late session melt-up, other big names who released earnings did not participate in the rise; Boeing (BA) and GM (GM) both finished in the red. This morning we look to Comcast (CMCSA), McDonald’s (MCD), Mastercard (MA) and many more. The heavyweight headline is after the bell with Amazon (AMZN) who after gaining 1.88% Wednesday has become a casualty to Facebook and is down 1.25% premarket. That release will be joined by Intel (INTC) and Starbucks (SBUX).
Traders must also keep an ear to ECB President Mario Draghi at his press conference. After the bank left policy unchanged and reiterated it will wind down QE by the end of the year, Draghi will be doing his best to keep the waters calm. Though it is unlikely we see his hand, we will be watching for any inclination that their first rate hike will be before or after September of next year.
Technicals: Price action closed out above major three-star resistance at 2829.75-2833.25 and despite the Facebook thrashing, the S&P has remained extremely constructive through the overnight holding first key support at 2833.25 exactly. Given the significance of Wednesday’s breakout on a technical basis, we now have major three-star support at ...
Today’s economic calendar
Manufacturers' shipments, inventories and durables orders increased $2.5 billion or 1.0% to $251.9 billion.
US international trade in goods and services was $43.1 billion, down $3.0 billion in May, down $3.0 billion from $46.1 billion in April revised.
Weekly US unemployment claims was 217,000, an increase of 9,000 from the previous week’s revised level.
EIA natural gas storage weekly report.
Treasury auction 7-year note, at 1 pm EDT.
Crude Oil (September)
Wednesday’s close: Settled at 69.30, up 0.78.
Fundamentals: Wednesday’s headline EIA inventory report was bullish because it showed a larger than expected draw in Crude, Gasoline and Cushing. However, production estimates showed an increase of 100,000 bpd in the lower 48 states and while this large surge was offset by a drop in Alaska, it still shows total estimated U.S production at 11 mbpd. The steady increase coupled strong technical resistance (discussed below) and the beginning of a seasonal loll period, buyers could not take Crude into the $70 handle.
Price action did not react much to the U.S and EU trade truce, however the currencies and other risk assets did so favorably. Considering the entire landscape, a failure to move lower today will likely attract buyers into the weekend.
Technicals: Strong major three-star resistance overhead at 69.66-69.93 has held price action back from regaining the $70 mark. However, the bulls are in the clear near-term driver’s seat as long as price action stays above what was a previous barrier at the ...
Gold (August)
Wednesday’s close: Settled at 1231.8, up 6.3.
Fundamentals: Gold has again retreated from key technical resistance (discussed below) but a major factor is the stalled rally in the Chinese yuan (CNY). After Wednesday’s strength, the currency is back within an earshot of the recent lows and the lowest level since July 2017. The ECB left policy unchanged and President Mario Draghi is getting underway with his speech this morning. The euro (EUR) will continue to play second fiddle to the yuan but nonetheless it remains crucial. Wednesday’s truce on trade between President Trump and the EU rallied the euro and supported Gold into the overnight. Durable Goods, Goods Trade Balance and weekly Jobless Claims all came in light this morning and this should act as a supportive factor for the metal but the ECB this morning is a bigger focus than the data.
Technicals: Gold has remained constructive to the downside, holding our pivot level at 1225.8-1227.9 and this is absolutely crucial in keeping the bears from regaining the most immediate-term edge. Right now, the bears have positioned and unless price action closes below there, the risk is to the upside. The problem though is, the buyers are not showing strong belief yet and first key resistance at ...
