This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Morning Express: October 11, 2019

By:

President of Blue Line Futures

E-mini S&P (December)

Yesterday’s close: Settled at 2941, up 22.00

Fundamentals: U.S benchmarks are surging into U.S hours Friday on hopes of an interim trade deal. President Trump has lauded progress between high-level delegates and is set to meet Vice Premier Liu He today. In the past, meetings between the two have marked a short-term truce in this ever-going dispute. Given that tensions were escalating as recently as 36 hours ago, this is certainly a breath of fresh air for market participants even though nothing of face value is likely to be achieved other than postponing an increase of tariffs set for October 15th. Still, traders must stay nimble as perceived progress has dissipated just as quickly in the past. The British Pound and European stocks are also surging with progress on the Brexit front. U.K Prime Minister Johnson and his Irish counterpart each see a “pathway deal” which opens the door to an agreement between the U.K and EU. All news is not positive though after an attack on an Iranian oil tanker in the Red Sea. State news is pointing blame on Saudi Arabia and Crude Oil jumped as much as 2% before settling in.

Fresh October Michigan Consumer data is due at 9:00 am CT. Boston Fed President Rosengren, a dissenter of both cuts this year, speaks at 12:15 pm CT and Dallas Fed President Kaplan speaks at 2:00.

Technicals: Price action has mounted steady gains through the night on trade deal hopes and while the S&P is at the highest level since last Tuesday, the NQ is at the highest level since September 24th. The S&P has crossed out above key resistance levels aligning with the high on the week but for us a move out above major three-star resistance at 2932.25-2937.75, which aligned multiple technical indicators including a gap close and a trend line, paved a path of least resistance to our next major three-star resistance at 2980-2985.50. The NQ is attempting to hold out above major three-star resistance at 7820-7841.50 and in doing such it opens the door to our next major three-star resistance level at 7955; a trend line from the record high. Support in the S&P comes in at 2959.50-2960.50 and holding out above here is bullish in the near term. Only a move back below major three-star support levels at 2941-2945 and 7760.25-7775, aligning settlements and our trailing momentum indicators, would signal a failure and likely encourage strong waves of selling.

Bias: Neutral

Resistance: 2980-2985.50***, 2994.50

Support: 2959.50-2960.50***, 2941-2945***

NQ (December)

Resistance: 7877*, 7955***, 8002.50***

Pivot: 7820-7841.50***

Support: 7799.75-7800.75**, 7760.25-7775***, 7691-7708***

Crude Oil (November)

Yesterdays’ close: Settled at 53.55, up .096

Fundamental: Amid a perfect landscape for Crude Oil the tape has not been able to hold onto gains. The U.S and China are suspected to be close on another interim trade truce and there is escalating tensions in the Middle East ahead of the weekend after an Iranian oil tanker was attacked. The most pressing news is the Iranian tanker which state news has accused Saudi Arabia of launching two missiles. Although Saudi Arabia has yet to comment, developments here are absolutely crucial heading into the weekend. This overshadowed IEA’s release of their Monthly Report which revised demand down by 100,000 bpd in 2019 and 2020, aligning with our longer-term Bearish narrative.

Technicals: On a pure technical basis, our major three-star resistance and sell target to go short at 54.70-55.00 could not have worked any better. However, given the two pressing fundamental stories, it is hard to pull the trigger ahead of the weekend. As for the longer-term technical, traders can feel more comfort in that decisive move above 54.70-55.00 is not a pure breakout as we have another wave of major three-star resistance at 55.92. Given this and our longer-term view, we will introduce a minor Bearish Bias with the plan to increase such coming out of the weekend. Furthermore, yesterday’s sharp outside reversal is another reason to be more on the cautious side. However, a move back below 53.53-55.55 today is very bearish.

Bias: Neutral/Bearish

Resistance: 54.70-55.00***, 55.92***

Support: 54.03-54.04*, 53.53-53.55***, 52.55-52.71**

Gold (December)

Yesterday’s close: Settled at 1500.9, down 11.9

Fundamentals: Gold is taking it on the chin this morning, focusing on a potential trade deal and rising Treasury yields which equate to dissipating odds for further Fed cuts instead of rising tensions in the Middle East. Still, the Dollar is noticeably weaker today due to strength in the Euro and Pound on Brexit progress, however, this also supports global yields. After jumping higher coming out of China’s Golden Week and despite weaker inflation data, the metal has steadily slipped. This emphasizes the near-term focus on a trade deal. Furthermore, Gold remains an overcrowded trade which signals we could see it exacerbate the downside in the near-term as longs jump ship

Technicals: Gold has decisively broken below a crucial level of technical support at 1495.4, one that we described as signaling the bulls holding the driver’s seat. Still, major three-star support comes in at 1484.5-1488.2; a move below here though opens the door to not only 1465 but major three-star support at 1450-1454. While a close back above 1495.4 will signal immediate weakness has been averted, only a close back above 1500.9 will neutralize the bears in the near-term.

Bias: Neutral

Resistance: 1500.9**, 1513-1515.6***, 1527.5***

Pivot: 1495.4 Support: 1484.5-1488.2***, 1465**, 1450-1454***, 1413.2***

The support and resistance levels are created through our systematic and proprietary technical analysis and ranked by significance from 1 to 4 stars (****). 1-2 star levels are typically best focused on intraday or early in a session to help confirm momentum. 3-4 star levels are used to define a floor or ceiling in a market, a move and close above or below could signal a breakout or breakdown.

Our bias is our outlook for the underlying market, with 7 separate rankings from outright bullish to outright bearish.

Bullish – Outright bullish

Bullish/Neutral – Bullish the market but there may be technical/fundamental headwinds around the corner

Neutral/Bullish – relatively neutral market with prices testing technical support

Neutral

Neutral/Bearish – relatively neutral market with prices testing technical resistance

Bearish/Neutral- Bearish the market but there may be technical/fundamental headwinds around the corner

Bearish – Outright bearish

Disclosure: Blue Line Futures

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Blue Line Futures and is being posted with permission from Blue Line Futures. The views expressed in this material are solely those of the author and/or Blue Line Futures and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

trading top