Commodity TRADING SCHOOL
COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 09/16/09
SUMMARY OF UPCOMING DATA 09/17/09
8:30 AM- HOUSING STARTS (600 K), JOBLESS CLAIMS (575 K)
10:00 AM- PHILADELPHIA FED SURVEY (8.0)
10:30 AM EIA INVENTORY READING NATURAL GAS
11:00 AM US 2, 5, YEAR NOTE AUCTIONS
QUADRUPLE WITCHING DAY (EXPIRATION OF SEPT STOCK FUTURES, STOCK INDEX FUTURES, STOCK OPTIONS, STOCK INDEX OPTIONS.)
DATA RESULTS 09/15/09
US CONSUMER PRICE INDEX (0.4% EX # 0.1%)
US INDUSTRIAL PRODUCTION (0.8)
EIA INVENTORY REPORT (CRUDE OIL -4.9 m)
HOUSING MARKET INDEX (19.0)
US DEBT REVIEW AND OUTLOOK
US TREASURIES fell for a third session, following the ongoing trend which has dominated the week. Equity market gains, fueled by recovery euphoria and ongoing declines in the value of the US dollar are making the holders of Treasuries less and less money as security concerns decline.
The short end of the yield curve felt the sting of recovery especially hard on data showing that output at US factories, mines, and utilities climbed more than expected last month. This report combined with Tuesday’s report on higher than expected drops in business inventories prompted many investors with funds parked in low yielding, short term treasuries to sell out and move their capital to riskier assets. Anticipation of Thursday’s announcement of the amounts of 2, 5, and 7 year notes coming to market likely left a sour taste in the mouths of potential buyers.
In spite of the seemingly overwhelming headwinds which Treasuries contended with today, they still appear to be remaining on course to range trade. Concerns regarding potential back steps in the global economic recovery and lagging indicators such as employment and sustainable revenue generation post government fiscal support should offer some support for Treasuries to remain somewhat range bound in the near term.
Technically, December 30 year futures continued its setup to test the 118-08 support level, which is beginning to show signs of cracking. Additional movement down should be checked by some short covering adherent to quadruple witching. Market filled in the downward gap and reversed back so momentum should set up to test 117-08.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES continued the juggernaut which is its upper trend, as better than expected readings on industrial production and consumer inflation pushed the major equities to their best levels of 2009. Energy, material, and technology stocks were among the leaders, taking a boost from the inline reading on US consumer price data. Industrial production and capacity utilization in the United States also rose to a six month high.
Many appear to be taken the euphoria of economic recovery to heart as any signs of apparent weakness bring fresh buyers who believe that global support for credit and fiscal stimulus will eventually win out the day for the foreseeable future. Higher yielding corporate debt also took its cue from equities as global risk tolerance continues to gain momentum.
Thursday brings potential volatility to the ongoing gains as quadruple witching (expiration of stock futures, stock index futures, stock options and options on stock index futures).
Technically, December S&P futures ran into some early challenge, but eventually powered through resistance at 1053.00. Market gained momentum to power up to a significantly overbought level. A pullback is due. Will it come? Factoring in desire for profit taking, look for the market to pull back to a 1056.00 initial support level with 1051.50 setting up as a key support level. Resistance sets up at 1065.25, with a break of this level setting market up to test 1072.00.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CHANGE |
|
|
US Z9 (US 30 YRS) |
119-05 |
120-01 |
118-13 |
118-29 |
-9/32NDS |
|
SP Z9 (S&P 500) |
1051.70 |
1064.10 |
1053.00 |
1063.50 |
+17.70 |
|
SP U9 (S&P 500) |
1056.00 |
1068.80 |
1053.00 |
1068.00 |
+17.70 |
Prepared by Rich Roscelli & Paul Brittain.
PLEASE EMAIL QUESTIONS OR COMMENTS TO RICH@BINVSTGRP.COM
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
