Record Highs and Bullish Engulfing Candles; It is all about the Dollar

BLUE LINE- MORNING EXPRESS

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

S&P, yesterday’s close: Settled at 4132.75, up 12.50

NQ, yesterday’s close: Settled at 13,975.75, up 167

Fundamentals: Yesterday, the NQ set a fresh record and fully completed its recovery after losing as much as 12% from the February 16th peak. Not to be ignored, the S&P set a new record for the ninth day out of the last ten. Volatility early yesterday on the Johnson & Johnson news was subdued by contained inflation. Core CPI came in at +1.6% YoY and +0.3% MoM, each only one tenth above expectations and far from the feared hot read, but this is something we expected. Additionally, after St. Louis Fed President Bullard, on Monday, correlated a 75% vaccination rate as a baseline to even begin thinking about a taper, the Johnson & Johnson news could have been broadly supportive; Big Tech and Work From Home stocks led the way.

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This morning, JPMorgan, Goldman Sachs, and Wells Fargo kick off earnings season. XLF, the Financial sector ETF, has gained 18% so far this year and banks have played a critical role in stabilizing the S&P amid a volatile first quarter for Tech. The Coinbase IPO and Federal Reserve speeches highlight the rest of today’s calendar. At our investment advisory, Blue Line Capital, Coinbase is certainly on our radar, but today’s opening price could leave little value relative to its $250 reference price. On Coinbase, Bitcoin set a new record of $64,896 overnight. 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: The path of least resistance is certainly higher, but is it getting near-term frothy? That question is completely dependent on the index that is breaking out (NQ), and less so on the one that has been (S&P). The NQ not only traded through but settled above our major three-star resistance aligning with its previous record at 13,888-13,964. This is a breakout, right? For now, yes, but it is not locked as we always like to see breakouts on a weekly basis. Let us also not forget that we have major three-star resistance at 14,035 and this is the last hurdle before a clear path of nearly another 2%. We are not the typical commodities brokerage, most do not believe stocks could achieve what they have, and this is where our wealth management arm separates us from the rest; the rest being those that have been trying to sell this market since S&P 3000, if not sooner, and providing a stale overbought thesis each week. We remain very Bullish in Bias, but we do want traders to take some caution until we see the NQ on a weekly close and given the S&P is nearing our next intermediate-term upside target of ... 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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