Trading the Noise - Blue Line Morning Express
Morning Express

As you know, our report goes out each morning to clients and Free Trial subscribers berfore 7:30 am CT. Enjoy our Fundamnetals below. But please register for a Free Trial of 1 or all 4 of of our Blue Line Express daily commodity reports in order to get all of our great insight; Techinicals, Fundamenals, and proprietary Bias and Levels. E-mini S&P, Crude, Gold. Contact our trade desk, we cover more - Treasuries, Nat Gas, Copper etc -312-278-0500 or info@bluelinefutures.com

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E-mini S&P (June)

Yesterdays close:Settled at 2827, down 9.50

Fundamentals:U.S benchmarks initially rallied after the Federal Reserve confirmed even the most dovish projections. They signaled no rate hikes this year and one in 2020, adding that they will end unwinding their balance sheet in September (known as Quantitative Tightening or QT). This is a more accommodative Fed than imagined for the foreseeable future. Why dont stocks love the news? First, the S&P has rallied 23% off the December low with the bulk of it coming for this exact reason. Furthermore, be careful what you wish for. By turning this dovish, one must ask themselves, what does the Fed find so frightening? So, while the market has had a one-way ticket north for nearly three months, it now has nothing more to price-in. With everything now known, only worsening economic data will make the Fed more dovish and this in and of itself should not be a good thing for the market.

U.S and China trade is also in the spotlight after President Trump said yesterday, he will keep tariffs on China until he is sure they are complying with a deal. Enforceability of a deal has been a key question in Washington and when it comes down to it, any deal must be enforceable, if not, its not a deal at all. The two sides continue to exude positivity ahead of next weeks round of meetings; U.S Treasury Secretary Mnuchin and U.S Trade Representative Lighthizer travel to Beijing.

On the data front, Philly Fed Manufacturing beat expectations and this breaks a streak of Manufacturing misses. One thing to think about is that with the Fed now known and priced-in; good news could be good news for a bit and bad news bad news.

Technicals:U.S benchmarks across the board are down a little less than 0.5% this morning. However, the NQ is still at a much more elevated level after taking out Tuesdays high by about 0.5% late yesterday. At that level, the NQ was met by our major three-star resistance 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)

Yesterdays close:Settled at 60.23, up 0.94

Fundamentals:Yesterday, Crude Oil finished sharply higher from its early morning low after the EIA delivered a very bullish inventory report totaling a composite drawdown of 18.3 mb and the Federal Reserve exceeded the most dovish expectations. In that EIA report, Crude Oil inventories were drawn down by 9.589 mb last week, the largest since July. Additionally, Imports increased last week. This is a stark reminder that this is typically a seasonally bullish time of year. This coupled with sanctions (Venezuela and Iran) and reduced exports from Saudi Arabia continues to lift price action. This morning, Philly Fed Manufacturing was a bright spot in an otherwise downbeat string of Manufacturing reads, and this could help breathe life into risk sentiment.

Technicals:Given a soft tape early in equity markets and Copper trading nearly four cents from the overnight high, both of which we find technically overvalued, we will again find value in fading the $60 region in Crude. We must see a close back below ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Gold (April)

Yesterdays close:Settled at 1301.7, down 4.8

Fundamentals:Gold settles at 12:30 pm CT which does not take Fed meeting or Minutes into account at 1:00 pm CT. Price action surged yesterday after the Fed confirmed even the most dovish projections. They signaled no rate hikes this year and one in 2020, adding that they will end unwinding their balance sheet in September (known as Quantitative Tightening or QT). While this is a more accommodative Fed than imagined for the foreseeable future and the Dollar Index traded sharply lower late yesterday, it is bouncing back this morning with the British Pound getting tagged by a penny amidst Brexit chaos and after the BoE policy meeting this morning. The Swiss National Bank also help a policy meeting this morning and the Franc is lower. These coupled with soft PPI data from Germany and a stronger than expected Philly Fed Manufacturing has forced the Euro to give back the bulk of its gains this morning, strengthening the Dollar. On the bright side, Gold is holding ground very well given this recovery in the Dollar Index. The USD/CNY is still in the red though it has pared some overnight losses; a weaker USD/CNY is very supportive to Gold.

Overall, the landscape in which the Fed provided yesterday is exactly why we have been unequivocally Bullish in Bias Gold and will remain such. Treasury yields in the U.S and those from around the world are all lower and we view this as fuel for the metal.

Technicals:Price action is holding firm, but we must see a close above 1315.3 in order to confirm this upbeat momentum. Gold faces major three-star resistance at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.


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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