Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, Forex and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on MoneyShow.com and short Midday Markets video.
Bill Baruch’s Midday Market Minute short video for Nov. 28 here.
Stocks rip on statements from Fed Chair Powell today.
Bill Baruch’s FX Rundown for Nov. 27-28 here.
Euro pressured. GPB slides. Yen lower. US dollar weighs on Aussie, CAD.
E-mini S&P (December)
Tuesday’s close: Settled at 2683.50, up 13.50.
Fundamentals: U.S. benchmarks are higher this morning and continue to pare last week’s losses. The risk appetite this week is night and day to the last and instead resembles that prior of the holiday week. It’s one where investors want to believe a positive outcome on trade talks between President Trump and his Chinese counterpart President Xi are possible. Buyers have shown up broadly and have ignored potentially derailing events that could spark talks on weaker growth such as President Trump’s tariff comments directed at Apple (AAPL), the news on GM (GM) and unflattering data.
Furthermore, the Federal Reserve has not miraculously turned dovish to support markets; Tuesday we heard more of the same gradual tightening process. This resilience is the sign of a market that was oversold and now wants to go higher. Ultimately, this is exactly what we were looking for in turning outright Bullish last week and calling for a bottoming process to begin.
To add further fuel to this anecdote, Tuesday Crude Oil fell out of bed and equity markets seemingly began to stall. At this point, the S&P (SPX) was 15 points from its intraday high and could have easily curled up into a ball and continued lower. Instead, price action perfectly held its bullish momentum indicators and trekked to new session highs before the close, a high that took out the overnight fat finger spike. This is the tape of a market that wants to go higher.
This morning we get the second look at Q3 GDP from the US Bureau of Economic Analysis along with Goods Trade Balance and Wholesale Inventories. New Home Sales in October are 544,000, 8.9% below the September rate. The big event today is Fed Chair Powell who speaks at noon EDT; we are looking for just enough to keep the market satisfied, a hole in the hawkish armor, but do not expect him to turn a corner ahead of the December 19meeting.
Technicals: Price action is very firm this morning and eyeing a test to major three-star resistance at ...
Crude Oil (January)
Tuesday’s close: Settled at 51.56, down 0.07.
Fundamentals: The weekly EIA inventory report is front and center this morning and early expectations for the first draw in 10 weeks were shot down after analyst expectations moved from -0.600 mb to +0.769 mb.
Furthermore, after the close Tuesday, API’s private survey reported a build of 3.453 mb of Crude. The market held ground remarkably well through the evening and actually traded higher. The product data reported by API didn’t really help with that (2.62 mb Gasoline and +1.185 Distillates). In fact, if anything, the strength came from a broader risk-on appetite and technical momentum created from holding the $50 mark and rallying into the close following a midday failure.
We have said this for weeks, we must see an inventory draw before the market even considers beginning a bottoming process, so we repeat: the weekly inventory report is front and center this morning. Expectations are for -0.769 mb Crude, -0.857 mb Distillates and +0.64 mb Gasoline.
Technicals: After multiple technical failures to get out above first key resistance at ...
Gold (February)
Tuesday’s close: Settled at 1219.9, down 8.8.
Fundamentals: We have warned for weeks that traders must approach this market with a short-term mindset; dips are to be bought but you must capitalize on the rallies as strong technical resistance (discussed in the Technical section below) sits overhead and this is a not a seasonably favorable time for Gold. This coupled with Tuesday’s options expiration and U.S. dollar (USD) strength hammered Gold in its worst session in nearly three weeks. The good news: we welcome this lower price action! It will give us much better value when looking to buy in the coming weeks.
Is the low in yet? We don’t think so, and traders will capitalize on patience.
The second look at Q3 GDP was softer than expected and both Wholesale Inventories and Goods Trade Balance were light. New Home Sales are lower in October. All eyes will be on Fed Chair Powell at noon EDT. Though we do not believe he will show more than a hole or two in his hawkish armor ahead of the December 19 FOMC Meeting, there may be expectations built for such that could be counterproductive for Gold. Feel free to call our trade desk at 312-278-0500 to discuss the landscape.
Technicals: Gold settled below the 50-day and 100-day moving averages Tuesday and this level will be a line in the sand to neutralize the weakness. Was Tuesday’s move a surprise? Certainly not, it was overdue for the metal after stalling against major three-star resistance at ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
