How to Manage the Post-Fed Repricing

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• This morning’s slate of economic data was friendly to the Fed with Unit Labor Costs -0.8% q/q versus +0.7% expected (though last quarter was revised lower), Nonfarm Productivity 4.7% q/q versus 4.1% exp and Jobless Claims rising to a 7-wk high at 217k v 210k.
• Apple reports earnings after the bell.
• Nonfarm Payrolls and ISM Services are due tomorrow.
• Keep an ear out for Fed comments in the case they feel Fed Chair Powell’s message was misinterpreted.

E-mini S&P (December) / E-mini NQ (December)

S&P, yesterday’s close: Settled at 4256.00, up 43.75

NQ, yesterday’s close: Settled at 14,744.50, up 254.25

Yes, we have increased our Bullish Bias to outright Bullish. However, we are not encouraging traders to chase this morning’s tape. Although the first opportunity to buy was Fed Chair Powell painting a symmetrical picture during his press conference for the risk of tightening too much and the risk of not tightening enough. This was the first glimpse of a victory lap since prematurely touting such in February. Asset classes across the board have responded, with the 10-year yield slipping to a two-week low of 4.64%.

As the E-mini S&P and E-mini NQ march higher, we cannot ignore gap resistance coming in at 4302.25-4303 as a place traders could take profit, encouraging a small pullback. In the case of such, we would look for a basing lower in order to prime for the next move higher. Furthermore, holding out above our Pivot and point of balance as well as first key support, previously major three-star resistance, would pave a constructive path higher. Only a break below rare major four-star support in the E-mini S&P at 4253.25-4256 would neutralize this bull leg.

Bias: Bullish

Resistance: 4290.50**, 4302.25-4303***, 4312.75**, 4327.50-4337.50***, 4401.75****

Pivot: 4280.50-4283.50

Support: 4271.25-4276.25**, 4253.25-4256****, 4248.50**, 4220.25-4224.25***, 4209.75-4215.50****

NQ (Dec)

Resistance: 14,948-14,952**, 15,109-15,138***, 15,202-15,241***, 15,380**, 15,452-15,468****

Pivot: 14,886

Support: 14,804-14,847***, 14,744-14,749****, 14,638-14,650**, 14,558-14,581***, 14,490-14,515****

Crude Oil (December)

Yesterday’s close: Settled at 80.44, down 0.58

A series of lower highs in Crude Oil futures, highlighted by a failure at major three-star resistance at 83.37-83.65 right at the traditional intraday open at 8:00 am CT yesterday, has encouraged us to become more cautious and turn our Bias to Neutral. Price action did cling to support, aligning above the $80 mark, and held it upon settlement yesterday. Although we remain upbeat over the intermediate and longer-term, Crude Oil may need to flush below the $80 mark, and ping one of two major three-star supports below there, 78.80-79.34 and 77.74. Still, a close out above 83.37-83.65 would quickly reinvigorate our Bullish Bias.

Bias: Neutral

Resistance: 81.82-82.08**, 82.36-82.45**, 83.37-83.65***

Pivot: 81.25-81.43

Support: 80.20-80.57***, 78.89-79.34***, 77.74***

Gold (December) / Silver (December)

Gold, yesterday’s close: Settled at 1987.5, down 6.8

Silver, yesterday’s close: Settled at 22.79, down 0.162

Gold and Silver futures are higher from yesterday’s settlement, but it has been a tough grind given the drop in both the U.S. Dollar and yields. Undoubtedly, there is geopolitical premium in both that is eroding and the market needs to find a balance between the repricing of yields and the precious metals space. For now, major three-star support in Gold will attempt to provide a floor at 1987.4-1991.3, and the bulls will attempt to take the driver’s seat while above here. While Silver remains less enthusiastic, holding out above first key support at 23.02-23.04 will be constructive on the session. Furthermore, Fridays given the weekend in the face of the Middle East conflict, have been friendly. However, tomorrow also brings Nonfarm Payrolls.

Bias: Neutral/Bullish

Resistance: 1999.2-2001.1**, 2004.3-2005.9***, 2009.2-2012.7****, 2019-2022.1**, 2028.6**, 2049.6-2057.4***

Support: 1987.4-1991.3***, 1978.2-1982.8***, 1971-1973.6***, 1863.8-1865.1***, 1944.7-1950.6****

Silver (December)

Resistance: 23.39-23.44***, 23.51-23.55**, 23.80-23.88****

Pivot: 23.11-23.13

Support: 23.02-23.04**, 22.89-22.95**, 22.79***, 22.65-22.72***, 22.53-22.56***, 22.36-22.39***, 21.72-22.01****

Bill Baruch, President & Founder, Blue Line Futures
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