September 25, 2018 - 6:53 AM EDT
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Equities in Clear Not So Fast. Crude Rips. USD Builds vs. Yuan, Gold

Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on and short Midday Markets video.

Bill Baruch’s Midday Market Minute short video for Sept. 25 here.
Equity markets backing off overnight highs. RUT holding positive now. 10-year Treasury buying opportunity. Crude testing $72.90. Silver is on the move ahead of option expiration. Bears driving USD. Gold holding.

E-mini S&P (December)

Monday’s close: Settled at 2925.50, down 8.25.

Fundamentals: U.S. benchmarks absorbed multiple jabs yesterday morning, but in true 2018 fashion resilience is the reoccurring theme. While energy notched a good session, it was tech that led the way. The NQ (IXIC) only gained 0.5% but finished 1.5% from its early session low.

Apple (AAPL) and Amazon (AMZN) both showed true leadership digging out of early losses to finish up more than 1%. Early on, the S&P (SPX) briefly pushed through major three-star support after early weakness on U.S. and China relations was followed by conflicting reports on Deputy AG Rosenstein.

However, what largely went under the radar at the same time was that Secretary of State Pompeo said American pastor Andrew Brunson could be released by Turkey as early as this month. This coupled with the developments of a new U.S. and North Korea summit soothed the geopolitical landscape in the face of deteriorating U.S and China relations.

Once it was found to be not true that Rosenstein was either resigning or being fired, the market slowly grinded back north. Yes, the U.S. market is surely resilient as it always seems to find that silver lining.

Are equities now in the clear? Not so fast. The escalating trade war between the U.S. and China cannot go unnoticed and at these levels we do not find it priced in.

A chief strategist from UBS said Monday that growth is due to slow and this could cause the Federal Reserve to rethink the December hike.

You might be thinking, “wait a second, I thought you said the Federal Reserve is in the driver’s seat.” They surely are, but with the 10-year yield at 3.11% this morning and nearing the highs of the year at 3.128%; this is simply a thesis from one person.

Furthermore, while we expect the Federal Reserve to bubble wrap tomorrow’s hike with a dovish rhetoric, it is very unlikely to see the December hike probabilities retreat below the 70%-75% region until there is substantial evidence of a slowdown. For this reason, we still find the market overvalued here but remain longer-term bullish.

Technicals: Monday’s weakness could not be sustained below major three-star support at 2922.75-2924.50 and price action has grinded higher into this morning. There are two key resistance levels close together that we are now watching. The first comes in at ...

Today’s economic calendar

S&P CoreLogic Case-Shiller Home Price Index.

Conference Board Consumer Confidence Survey.

President Trump is scheduled to speak at the U.N. General Assembly today.

Crude Oil (November)

Monday’s close: Settled at 72.08, up 1.30.

Fundamentals: Crude Oil ripped though major three-star resistance Monday after the OPEC and non-OPEC alliance left production levels unchanged despite rumblings of a potential 500,000 bpd increase on Friday.

So, where did it rip to? Our next key resistance level of course!

What now? Fundamentally, inventory expectations begin to trickle out and the focus will shift to domestic data especially after the alliance showed concern for rising non-OPEC production and slowing demand growth.

Most importantly though, in the now, the question will be whether the loll season begins to turn the corner. Cushing has been drawn down for the last two weeks and traders must keep a close eye on this.

Geopolitically, there are reports of plans to develop a new payment system for Britain, China, France, Germany and Russia to continue doing business with Iran after the sanctions are re-imposed.

resident Trump is scheduled to speak at the UN General Assembly today and this will surely be a topic. Iranian President Rouhani is in New York for the assembly but has said there are no plans to meet with Trump.

Technicals: Price action is holding ground tremendously well in what is a bullish pennant breakout on the November-only chart. Still, first key resistance at ... 

Gold (December)

Monday’s close: Settled at 1204.4, up 3.1.

Fundamentals: The U.S Dollar Index (DXY) has pared yesterday’s late recovery and Gold continues to hold ground well. However, the U.S. dollar (USD) has strengthened against the Chinese yuan (CNY) and is trying to regain the highest level since August 24 and this has held Gold back once again from pushing and holding out above first key resistance.

On the other side of the coin, it is great to see Gold continue to act constructively. The Federal Reserve begins their two-day policy meeting and is expected to hike tomorrow, but it is their economic projections which will be most important. Today, S&P CoreLogic Case-Shiller Home Price Index is out and the Conference Board Consumer Confidence Survey.

Technicals: Price action continues to struggle to trade out above first key resistance at ... 

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View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.

Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.

Source: (September 25, 2018 - 6:53 AM EDT)

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