Did you focus on the bigger and broader picture?
Posted: July 3, 2023, 10:37 a.m.
The ISM Manufacturing report for June is due at 9:00 am CT and follows the final SPGI read at 8:45 am CT.
E-mini S&P (September) / E-mini NQ (September)
S&P, yesterday’s close: Settled at 4488.25, up 52.50 on Friday and 99.25 on the week
NQ, last week’s close: Settled at 15,337.00, up 236.75 on Friday and 278.75 on the week
What a strong close to the second quarter and the first half of the year. E-mini S&P futures settled Friday at the highest level since April 7, 2022. E-mini NQ futures are retesting the June 15th settlement, the highest since January 14, 2022. While many have taken an overly cautious and even bearish approach all year, we have done our best to keep our eyes on the bigger, broader picture. Going back to the Morning Express on November 8th, we said, “There have been 18 Midterm Elections since 1950; six and 12 months out, the S&P was higher every single time. In fact, after three months, the S&P was only negative once, in February 2003, following the 2002 Midterms the S&P was -7.8%. During such a tumultuous year (in 2022), if this does not get you excited, then we do not know what will.” Additionally, there have only been four times dating back to 1928 when the S&P was down in consecutive years. Some called 2023 different, saying it would be an anomaly and ‘here comes the big bad recession’. However, we pounded the table saying, “the stock market is a leading indicator.” Companies have lowered expectations so significantly to get ahead of recession fears that when you couple the landscape with a slowing pace of monetary tightening, we must “bring out the 2019 playbook” when the E-mini NQ futures gained 38%.
Despite strong overhead resistance, the momentum coming out of this two-week consolidation is undeniable. Still, we must see E-mini S&P futures clear major three-star resistance at 4488.25-4493.75 and 4498-4500 in order to secure a breakout. Similarly, resistance in E-mini NQ futures aligns at that high settlement at 15,337-15,374. We remain Bullish in Bias and expect buoyant tailwinds while price action holds above first key support at 4471.25-4474.25. Furthermore, in the case of weakness, there is strong support detailed all the way down to Thursday’s gap settlement and rare major four-star resistance at 4430.75-4435.75.
Bias: Neutral/Bullish
Resistance: 4488.25-4493.75***, 4498-4500***, 4509**, 4536.50-4439.25***
Pivot: 4580.75
Support: 4471.25-4474.25**, 4465**, 4453.25-4455.50***, 4441.50-4444.75*, 4430.75-4435.75****, 4417.50-4418.75***, 4407.25-4409.75***
NQ (Sept)
Resistance: 15,337-15,374***, 15,475-15,500***
Pivot: 15,300
Support: 15,238-15,268***, 15,202-15,219**, 15,078-15,095**, 15,025-15,037***, 14,963-14,986**, 14,856-14,898****
Crude Oil (August)
Yesterday’s close: Settled at 70.64, up 0.78 on Friday and 1.48 on the week
Crude Oil futures are hitting a one-and-a-half-week high to kickoff the month, and as Saudi Arabia gears up to remove 1 mpbd from global Oil output. Although it is terrific to see the bullish turn above $70, there are still tremendous headwinds, and we have major three-star resistance at 72.43-72.65, a pocket price action has struggled to hold going back to May 2nd. Previous resistance will now be support, and this week is setting up to be a constructive one as long as Crude Oil futures hold above major three-star support at 69.93-70.33.
Bias: Neutral/Bullish
Resistance: 71.93**, 72.43-72.65***, 73.29-73.37**
Pivot: 70.60-70.73
Support: 69.93-70.33***, 69.35-69.53**, 68.93-69.03***, 66.96-67.29***
Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 1929.4, up 11.5 on Friday and down 0.2 on the week
Silver, yesterday’s close: Settled at 23.02, up 0.222 on Friday and up 0.471 on the week
Gold and Silver futures finally showed life in tandem and held it through settlement. Was this simply end of month and end of quarter positioning, or is there staying power? This starts with a slate of June Manufacturing data from SPGI at 8:45 am CT and the more closely watched ISM report at 9:00 am CT. Poor data will spark safe-haven demand, weakening the U.S. Dollar and rates. Given the significant damage in recent weeks, there will be several waves of heavy supply attempting to keep rallies in check. The first comes in at major three-star resistance in Gold at 1929.4-1931.5 and in Silver a bit overhead at 23.29-23.34.
Bias: Neutral/Bullish
Resistance: 1929.4-1931.5***, 1936.1**, 1940.3-1943.4**, 1949-1949.6***
Pivot: 1922
Support: 1915.4*, 1906.2-1911.6***, 1900.6-1902.3**
Silver (September)
Resistance: 23.11-23.15*, 23.29-23.34***, 23.43-23.49***
Pivot: 22.97
Support: 22.89-22.91***, 22.48-22.54***, 22.05-22.40****
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