OVX and Bullish Engulfing - Commodities Update

BLUE LINE- MORNING EXPRESS

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Crude Oil (May)

Yesterday’s close: Settled at 60.18, up 0.48

Fundamentals: Crude Oil’s daily trading range has been tightening. In fact, the CBOE Crude Oil Volatility Index (OVX), for the last two days, has been at the lowest level since March 4th and 5th. At that time, Crude rose to its high of the year on Monday the 8th, before reversing. The volatility suppression could be a sign of bullish things to come. Regardless, we expect today’s EIA data and May Options Expiration to help Crude breakout of this tightening range. Crude was lifted early this morning on the IEA Monthly Report. They increased their demand forecast by 230,000 bpd, citing the vaccine rollout, improving global economy despite a fragile recovery being threatened by the ongoing pandemic. Expectations for today’s EIA data is -2.899 mb Crude, +0.786 mb Gasoline, +0.971 mb Distillates.

Technicals: Price action on Monday surged out above our momentum indicator and the ensuing pullback held that rising line ever since. This has been supportive to the tape and coupled with a break above the trend line from March 15th signals higher prices are likely. Still, we have major a ceiling of major three-star resistance at ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.

Gold (June) / Silver (May)

Gold, yesterday’s close: Settled at 1747.6, up 14.9

Silver, yesterday’s close: Settled at 25.426, up 0.559

Fundamentals: Yesterday’s contained inflation data helped give Gold and Silver the boost they needed. There is reason to believe that coupled with strong technical resistance, Friday’s hot PPI data and fear CPI would be the same, weighed heavily on price action up until yesterday’s data. Make no mistake though, Gold and Silver are not in the clear and certainly still have their work cut out for them both technically and fundamentally. A weaker U.S. Dollar has been slipping since peaking into the end of March but was bottoming out and yesterday’s CPI data allowed it to continue the slide; the Dollar Index tagged the lowest level since March 18th. The Treasury complex has also been supportive as this week’s auctions were met with overall steady demand and ongoing pandemic concerns have also helped keep a bid. Overall, the landscape is ripe for extended gains, but remains fragile. Fed Chair Powell speaks at 11:00 am CT. He is followed by New York Fed President Williams at 1:30 pm CT, Fed Governor Clarida at 2:45 pm CT, and Atlanta Fed President Bostic at 3:00 pm CT, each is a 2021 voter. Dallas Fed President Kaplan rounds out the day, speaking at 5:05 pm CT.

Technicals: Both Gold and Silver had a tremendous session yesterday, each displayed outside bullish daily bars. Gold is trading back to and battling at a key level of resistance at 1746.7-1747.1, a level in which it cleared only briefly last Thursday. However, it is major three-star resistance above there that is most significant at 1756.1-1759.9. On a positive note, support is building just below the tape and begins with our momentum indicator at 1743; continued action above here is supportive. As for Silver, it is also trading above our momentum indicator that comes in at 25.35; continued action above here should lead price action to major three-star resistance at ... Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.

Our daily research overs the S&P, NQ, Crude Oil, Gold, Silver, Currencies, Corn, Soybeans, Wheat, Livestock, and Softs markets. SIGN UP FOR A FREE TRIAL. YOU KNOW WHERE TO GO! Visit us at www.bluelinefutures.com

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