Overnight, Precious Metals are breaking out after yesterday's rally, which was impressive given the strength in headline PPI numbers, where futures came under immediate pressure, but we were able to shrug it off and focus on Federal Reserve Chairman Jerome Powell's speech, where he still believed that inflation would come down gradually. We saw the U.S. Dollar, which has been in a strong bull market, begin to stall, and two-year treasury yields also slide. The squeeze was back in the Meme stocks, with AMC and Gamestop being halted multiple times; the only question traders are asking themselves is, will this spill back over into bitcoin and Silver? Time will tell. 

Market Moving Events 

Today, the focus will shift back to more inflation data with CPI at 7:30 AM, along with Retail Sales, and with traders geared up for the most important data release of the year. Expectations are for CPI to slow to 0.3%, which comes at a time when global equities are near record highs.  

Copper Squeeze

Copper futures are the first metals to face a squeeze, with prices up over 10% on the week. Anticipation mounts as to whether it can spill over into its industrial sister, Silver. Yesterday, we attacked a call spread out into August that had a cost of around $1000, could potentially pay out 20 times that, and has 71 days till expiration. I recommended this trade to many of our clients, and currently, our award-winning metals program maintains a similar position. For more information on the call spread, reach out to me directly or call the trading desk. 

S&P 500

Looking at the S&P 500 futures, after the PPI release, futures quickly traded down and bounced near our first major support level, 5210, before trading back up to 5265-75, which is pocket resistance. A break above 5210 could lead to a larger move to 5300 and 5330. Any break below 5210 could lead to a further correction to 5186 (the 50 DMA). 

Crude oil futures continue to trade in a consolidation pattern with $77 on the downside and $80 on the upside. Futures will need to break this range to determine the next meaningful direction. 

Gold/Silver

The key levels to watch on Gold are 2385 and 2350. Remember, "old resistance, new support," and we do not want to see futures break that support. This may lead to another round of consolidation, where 2300 and 2293 are your critical levels to watch below that and our "line in the sand."

Connect with Phil: https://bluelinefutures.com/2023-signup/?utm_source=Phil-Streible-Barchart 

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