PCE, Tech Tailwinds, and OPEC+

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

S&P, yesterday’s close: Settled at 4559.25, down 3.75

NQ, yesterday’s close: Settled at 16,023.75, down 24.25

E-mini S&P and E-mini NQ futures reversed sharply from yesterday’s strong open and hefty overhead supply. However, the tape has hung in well given that additional weakness below Tuesday’s low would have been detrimental to the bull case. Instead, this price action could look similar to April 12th trading against the February highs, a poor close but one that did not break the bull rally’s back.

After hours, strong earnings from Salesforce and Synopsys helped lift sentiment into today’s session and ahead of a critical read on PCE, the Fed’s preferred inflation indicator. SNPS is a holding of Blue Line Capital, and it does not get enough notoriety for the pulse it has on the AI space as many of the top companies, like NVDA, are clients of the company.

Synopsys is the leader in EDA (electronic design automation) software. From the company’s website, Synopsys technology is at the heart of innovations that are changing the way people work and play. Self-driving cars. Machines that learn. Lightning-fast communication across billions of devices in the datasphere. These breakthroughs are ushering in the era of Smart Everything―where devices are getting smarter and connected, and security is an integral part of the design. The company remains very upbeat on next year, and in an interview with IBD, Chief Financial Officer Shelagh Glaser said AI is one of the company’s “big drivers,” yet it’s still in the “early innings.”

Bias: Neutral/Bullish

Resistance: 4567.25-4570**, 4574.50-4578**, 4597.50***, 4653****

Pivot: 4563

Support: 4559.25**, 4549.25-4555***, 4537.75-4541.25**, 4524.50-4527.50***, 4512.75-4514.25***, 4498-4503***

NQ (Dec)

Resistance: 16,071-16,089**, 16,104-16,117**, 16,159-16,173-16,209****, 16,265-16,275****

Support: 16,013-16,024**, 15,937-15,942**, 15,894-15,917***, 15,825-15,832**, 15,790***, 15,719-15,732***

Crude Oil (January)

Yesterday’s close: Settled at 77.86, up 1.45

Early strength in Crude Oil futures is underpinned by Saudi Arabia winning backing for OPEC+ cuts. OPEC meeting ended, JMMC meeting is on deck, and then OPEC+ ministers will meet.

Yesterday’s EIA report was not bullish, with production holding at a record, and surprise builds across the board. However, the SPR increased by 315,000 barrels and it is refreshing to see price action respond to technical support.

Bias: Neutral/Bullish

Resistance: 78.39-78.46**, 78.93-79.20***, 79.55-79.83***, 80.10-80.23***, 80.60-80.79***

Pivot: 77.77-77.95***

Support: 77.12-77.40***, 76.26-76.49**, 75.67-75.83***, 74.64-74.73***, 73.66-74.05****, 72.91-73.09***, 72.31-72.47***, 70.00-70.69***

Gold (February) / Silver (March)

Gold, yesterday’s close: Settled at 2060.2, up 27.2

Silver, yesterday’s close: Settled at 25.302, up 0.264

With PCE on tap, the Fed’s preferred inflation indicator, it is also important to remember what we wrote on Tuesday: The December futures roll off the board through tomorrow, and like every expiration date this year, due to higher interest rates and cost to carry, there is approximately a $20 spread from December to the now front month February Gold contract and a 0.35 spread from the December to now front month Silver contract. The problem is this higher roll spread has seemingly deterred momentum buying into month-end spread rolls. Therefore, while encouraging to see higher prices, we are taking it with a grain of salt.

Bias: Bullish/Neutral

Resistance: 2067-2072.7***, 2097.1****

Pivot: 2063.5

Support: 2055.9-2057.5**, 2047.9-2052.9***, 2037.7-2039.7***, 2026.5-2029.7***, 2023.3-2023.9***, 2013.2-2015.5**, 2000.4****

Silver (March)

Resistance: 25.52**, 25.59-25.61***, 25.70-25.78****, 26.09-26.10***

Pivot: 25.42

Support: 25.23-25.30***, 24.89-24.94****, 24.69-24.72***, 24.50-24.56**, 23.96-24.03***, 2343-23.46***

Bill Baruch, President & Founder, Blue Line Futures

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