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E-mini S&P (March)
Last years close:Settled at 2676, the lowest level in two weeks
Fundamentals:We finished 2017 on a high note, the S&P not so much. Fridays close marked the ninth year in a row that the S&P failed to finish the last week of the year in the green. It has averaged a loss of 1% in that time. Price action has stabilized into this morning and we are hesitant to form an immediate bias at this point. Equity markets in Europe have decided to play catch up to the U.S action late in the last session of the year, rather than following China higher. The Shanghai Composite is up 1.25% while the Hang Seng is up 2%. Manufacturing PMI data out of China over the weekend was in line with expectations while last nights Caixin read came in much stronger. Manufacturing data out of Europe confirmed strong flash reads two weeks ago. There is no data out of the U.S today but we look to ISM Manufacturing tomorrow morning and FOMC Minutes in the afternoon. Of course, Friday brings Nonfarm Payroll.
Technicals:Price action traded above and Pac-Manned the 2698 all-time high early in Fridays session by a quarter point before paring gains and seeing strong waves of selling in the last hour.Please sign up for a Free Trial of 1 or all 5 of our daily Blue Line Express commodity reports to view our entire technical outlook and proprietary bias and levels.
Crude Oil (February)
Last years close:Settled at 60.42
Fundamentals:Crude traded to a new swing high of 60.74 to start the year. Protests and clashes with police in Iran have sparked some supply concerns. However, the Forties pipeline is back to normal flows and the Libyan pipeline that exploded last week is also back online. Inventory data will be delayed a day due to the New Year holiday which means API will be out tomorrow late afternoon. In the midst of pipeline outages and now the Iran situation, lets not forget that China was also a major catalyst in the rise of Crude late in the year. After raising import quotas by 55% for 2018 in November they issued their first batch last week. Also, last nights read on Caixin Manufacturing was better than expected.
Technicals:Price action remains elevated and our Bias remains Neutral. The bulls will have the clear upper hand as long as price action stays above 59.96.Please sign up for a Free Trial of 1 or all 5 of our daily Blue Line Express commodity reports to view our entire technical outlook and proprietary bias and levels.
Last years close:Settled at 1309.8, the highest since September 25th
Fundamentals:Gold continues its melt up and has reached the highest level since September 26th. After getting squashed ahead of the Fed rate hike and tax-reform, the metal has come back with a vengeance, just as we predicted. The New Year kicks off with a big week, one that could solidify Gold above the $1300 mark for weeks to come. Though there is no data today, tomorrow brings ISM Manufacturing and FOMC Minutes. Thursday begins Fed speak. Nonfarm Payroll is due Friday, ISM Non-Manufacturing and more Fed speak. Though the new Fed dissenter, Chicagos Evans, is not scheduled this week it will be very interesting to see what many have to say after tax-reform was signed and if their tones change at all. The U.S Dollar has been whacked and started 2018 how it went out in 2017, lower. It is now at the lowest level since September and has lost 2.3% since the day the Fed hiked rates. We believe there is at least another 4% to the downside which would be a key catalyst to sending Gold to $1400 in 2018.
Technicals:The bears have gone into hibernation and no one wants to stand in the way of this rally. We remain very Bullish but are always available to discuss creative ways to lock in gains, call our trade desk at312-278-0500.Please sign up for a Free Trial of 1 or all 5 of our daily Blue Line Express commodity reports to view our entire technical outlook and proprietary bias and levels.
Natural Gas (February)
Last years close:Settled at 2.953
Fundamentals:We discussed exactly this on Friday. The pattern of strong starts to the week before price action dissipates. We hope to see this trend begin to change as the market turns bullish. However, this is still the trend and bulls are taking something off table after a heck of a bailout package last week. The Polar Vortex is real and early estimates of the stock report this week are for a draw of over 200 bcf. Next weeks potential record continues to expand with expectations well above -300 bcf (our figures show the current record at -287 for the week ending January 10, 2014).
Technicals:After gaining 11% last week, price action extended above major three-star resistance to start the year and reached a high of 3.097.Please sign up for a Free Trial of 1 or all 5 of our daily Blue Line Express commodity reports to view our entire technical outlook and proprietary bias and levels.
Last years close:Settle at 124015
Fundamentals:The treasury market stayed bid into the long New Years weekend and saw support from equity profit taking ahead of the bell. We believe this bottoming process has begun since the Fed hiked rates and tax-reform legislation was signed. Recent data has been solid, but this week will be key. Though today is quiet, tomorrow brings ISM Manufacturing and FOMC. Fed speak begins with Bullard on Thursday and lasts through Friday. As we discussed above, it will be important to see how their tone might have changed after tax-reform was signed. Friday also brings Nonfarm Payroll which could really set the stage for Q1 expectations as we will be watching wage growth. ISM Non-Manufacturing is also due Friday.
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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.