Trading the Noise - Blue Line Morning Express
Bill Baruch of Blue Line Futures - InsideFutures.com - Mon Feb 11, 8:52AM CST
Morning Express

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E-mini S&P (March)

Yesterdays close:Settled at 2706.25, up 2.25

Fundamentals:U.S benchmarks are pointing higher this morning after getting a boost from positive reports out of Beijing on trade. Of course, sentiment is upbeat as the next round of trade talks between the U.S and China get underway with lower level representatives today. If each side was pessimistic, then why hold the talks at all? The lower level representatives are expected to lay significant groundwork before U.S Trade Representative Lighthizer and U.S Treasury Secretary Mnuchin meet with their Chinese counterparts later this week. The hopium continues but we must see substance as the March 1st deadline approaches. Substance being China willing to resolve issues pertaining to stealing intellectual property and forced technology transfers. In other words, they must level the playing field when doing business in China. On component to watch closely this week is discussions surrounding the disputed South China Sea; it is unlikely that the U.S is willing to meet Chinas demands on this front halting progress.

There is also some truth to the idea that a government shutdown is lifting price action in the near-term. The White House noted that every week the government is shutdown slows growth by 0.1%. As crazy as it sounds, slowing growth supports the stock market as it keeps the Federal Reserve from peeling away the Kool-Aid.

Earlier this morning, data out of the U.K was awful with Manufacturing, Industrial Production, Business Investment and GDP MoM all contracting at a worse rate than expected. Growth was the slowest since 2012. Nothing like a fresh round of bad news to lift equity markets; the FTSE and other major European benchmarks are all up about 1%. In the U.S, we look to some of the first public comments from Fed Governor Bowman at 10:15 am CT.

Please read our Tradable Events this week for additional details on everything from U.S and China trade to the Fed and growth.

Technicals:On Friday, both the S&P and NQ completed a downswing that ultimately tested and held their respective major three-star supports. The overnight price action has extended out above settlement and corresponding resistance; this now brings major three-star support on the session 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 (March)

Last weeks close:Settled at 52.72, down 0.08 on Friday and down 2.54 on the week

Fundamentals:Crude has pared Fridays gains and is again flirting with the $52 mark. Although there are several stories floating around and varying from OPEC and non-OPEC cooperation, Iraqi production, U.S-China trade and potential U.S legislation banning OPEC, nothing has truly swayed prices directionally. We find this market overall heavy after achieving a technically significant resistance level without any drawdowns in U.S inventories. Weighing on commodities in general is the strengthening Dollar. While the Dollar Index is up nearly 0.25%, coming out of Chinas Lunar New Year the Yuan has lost 0.67% against the Dollar and this is the true headwind to commodities. Headlines on everything from OPEC to U.S and China trade will be crucial as the session develops but remember, inventories will quickly come into the picture in 24 hours.

Technicals:We continue to hold a Bearish Bias in Crude at these levels targeting ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Gold (April)

Last weeks close:Settled at 1318.5, up 4.3 on Friday and down 3.6 on the week

Fundamentals:Gold is getting a boot to the face this morning with the Chinese Yuan weakening by 0.67% against the Dollar as China comes out of the Lunar New Year holiday. Typically, this has been a supportive week for the metal. After rallying to start the year, Gold sees profit taking through the Lunar New Year only for Asia to come back from holiday and see more attractive prices. There is no major data from the U.S today, however we look to fresh comments from new Fed Governor Bowman at 10:15 am CT. Data out of the U.K this morning was horrific, and this has given some support broadly to the Dollar, however, this is the Dollar strengthening for reasons out of Europe. If it gets reasons from to weaken from U.S, we could see Gold make a quick U-turn on the session. Treasuries and the Yen are also sharply lower.

Technicals:Last week, Gold got a very tradable test to our back the truck up, major three-star support 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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