China Stimulus Plans Boosts Risk Environment
Posted: July 25, 2023, 9:39 a.m.
E-mini S&P (September) / E-mini NQ (September)
S&P, yesterday’s close: Settled at 4583.50, up 18.75
NQ, yesterday’s close: Settled at 15,561.25, up 21.25
E-mini S&P and E-mini NQ futures traded resiliently through yesterday’s session, responding to a strong floor of support. For the E-mini S&P, this has been our line in the sand defining our more Bullish Bias at 4560.50-4565.75. For the E-mini NQ, yesterday’s low was 15,483, right into rare major four-star support at 15,444-15,475. To the upside, major three-star resistance in the E-mini S&P aligning with a gap from last Wednesday’s close comes in at 4594.25-4597, and we must see a close above here in order to invite buying to new cycle highs. The E-mini NQ must close above 15,719-15,733, aligning multiple indicators going back to Thursday’s selling and Friday’s failed rally at the open to neutralize the near-term wave of weakness.
This all builds into big tech earnings that begin after the bell today with Microsoft and Alphabet. Regardless of how today’s tape finishes today, the second and third largest companies by market cap will have their final stamp, setting things up for Wednesday’s FOMC policy decision. Home price data out this morning from the OFHEO and Case Shiller was overall stronger than expected. CB Consumer Confidence is up next at 9:00 am CT. Also, the Treasury will auction $43 billion 5-years at noon CT.
Bias: Bullish/Neutral
Resistance: 4594.25-4597***, 4606-4609.25***, 4625.50-4631**
Pivot: 4583-4586.50
Support: 4576**, 4560.50-4565.75***, 4541.75-4545.25***, 4531-4536.75**
NQ (Sept)
Resistance: 15,642-15,654**, 15,719-15,733***, 15,772-15,793**, 15,856-15,895***
Pivot: 15,584-15,592
Support: 15,522-15,552**, 15,444-15,475****, 15,254-15,260***
Crude Oil (September)
Yesterday’s close: Settled at 78.74, up 1.67
Crude Oil futures tacked on another 2.17% yesterday, in their best session since July 11th. Yesterday morning, we noted the comments coming out of China’s Politburo signaling more support for the economy. Crude Oil was the first to respond, as it already incurred technical breakout tailwinds in the prior sessions. For instance, Copper had a strong day yesterday but did not surge until Asian hours overnight. U.S. inventory data will come into the picture as today unfolds into tomorrow’s official report; early expectations are for -2.4 mb Crude Oil, +0.146 mb Gasoline, and -0.075 mb Distillates.
As price action hit the next breakout leg trigger above 77.15-77.37 and closed in on the psychological $80 mark yesterday, it would have been prudent to begin trimming. We certainly made sure to monetize longs in our Commodity Trading Advisor, Blue Creek Capital Management, and will look for a reentry upon a retest of this previous resistance, now support aligning with unchanged on the week and prior highs from July 13-14.
Bias: Neutral/Bullish
Resistance: 79.14-79.28**, 80.00-80.39***
Pivot: 78.65
Support: 78.14**, 77.07-77.37***, 76.53**, 75.81**, 75.07-75.32***
Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 1962.2, down 4.4
Silver, yesterday’s close: Settled at 24.581, down 0.274
Gold and Silver futures traded higher on China’s economic support plans, but Gold is surrendering the move as the U.S. Dollar Index points higher for the fifth session in a row and due to broad Treasury weakness (higher rates). Silver’s increasing industrial demand has it taking some queues from Copper this morning, but make no mistake, the precious metals complex is on soft footing ahead of tomorrow’s FOMC policy decision. However, it is notable that there is strong support for Gold down to 1949-1949.6, and Silver responded to a critical area leading into 24.27-24.39 yesterday.
Home price data out this morning from the OFHEO and Case Shiller was overall stronger than expected. CB Consumer Confidence is up next at 9:00 am CT. Also, the Treasury will auction $43 billion 5-years at noon CT.
August Gold options expire tomorrow at 12:30 pm CT and the December futures contract will be front month Thursday.
Bias: Neutral/Bullish
Resistance: 1965.6-1966.1**, 1969.8-1970.2***, 1974*, 1977.5-1980.8****, 2000.7-2001.4***
Pivot:
Support: 1961.2-1963.6**, 1956.4-1558.9**, 1949-1949.6***
Silver (September)
Resistance: 24.82***, 24.95**, 25.07-25.11***, 25.23**, 25.46-25.53**, 25.76-25.88***
Pivot: 24.72
Support: 24.66**, 24.51-24.58***, 24.27-24.39***
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