Commodity TRADING SCHOOL
COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 01/07/10
SUMMARY OF UPCOMING DATA 01/08/10
8:30 AM: US NON FARM PAYROLLS (+10,000)
8:30 AM: US UNEMPLOYMENT (10.1%)
10:00 AM: US WHOLESALE TRADE
DATA RESULTS 01/06/10
US WEEKLY JOBLESS CLAIMS (434K/450K)
EIA INVENTORY REPORT-NAT GAS (-153 BCF/-124 BCF)
US 3 ($40B), 10 ($21B), 10 YR TIPS ($10B), 30 ($13B) YEAR DEBT AUCTION ANNOUNCEMENTS
US DEBT REVIEW AND OUTLOOK
US 30 YEAR FUTURES continued Wednesday’s negative bias-though trading was subdued (not surprisingly) ahead of the highly anticipated (something needs to shake up market activity) December nonfarm payroll numbers and unemployment. Market participants seem drawn to the notion that job creation may actually arise from the ashes after 2 years of negative readings.
Several factors contributed to the limited negative bias. The BOE (Bank of England) kept rates and its monetary policy (including asset purchase plans) intact. This development appeared to follow along with the FOMC strategies suggesting that the economies are not ready to fly on their own yet, as rising commodity prices and interest rates may be getting ahead of the sustainability of economic development. This ongoing monetary support by governments bodes well for the cost of hedging against corporate defaults, allowing for a foundation of support for higher yielding/higher risk investments. How long that support may last and its effectiveness is one that traders are beginning to ponder, with sobering answers expected to form later in the year.
Technically, 30 year Treasury futures appear to be consolidating at the 115-00 level, suggesting a possible upside spike that should allow market to test the 115-28 level. A break of this level could set up target of 116-12. Downside trend needs to find momentum to break 114-20, with 113-28 setting up as confirmation that downside trend remains in place.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES managed to post a slight upside bias today. Strong gains in the financial sector managed to overcome profit taking in energy and commodity stocks which were hammered by a stronger US dollar as well as an announcement that China would be raising interest rates in order to curb unmanageable growth. Retail stocks also helped the major indices to close near their best levels of the session and the year (short as it is).
US weekly unemployment claims were slightly better than expected, support a rally in the US dollar which appeared to benefit risk tolerance, as expectations appeared cautiously positive for tomorrows employment data. Consensus is for the unemployment rate to remain near 10% and for the US economy to show the first reading of job creation in nearly two years.
Consumer discretionary stocks also helped to lift the major indices higher. Reports showed that the majority of major retailers posted higher than expected sales. The positive numbers appeared tied to the strategy of pent up demand and strong price and inventory management.
So, we wait for Friday’s fun from the data release and the volatility which appears inevitable as the data is pulled apart and run through a microscope to find innumerable interpretations.
Technically, little has changed for March S&P futures. The contract continues to have the potential to set up for a test of 1142.00. This should hold as an initial resistance point, with 1150.00 as a breakout to the upside. Support for the contract sets up at 1117.00, which is a significant support target and should be tested within the next two weeks.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CLOSE |
CHANGE |
|
US H0 (US 30 YRS) |
115-02 |
115-23 |
114-26 |
115-09 |
-1/32nds |
|
SP H0 (S&P 500) |
1130.50 |
1138.70 |
1127.50 |
1137.50 |
+4.50 |
|
|
|
|
|
|
|
Prepared by Rich Roscelli & Paul Brittain.
PLEASE VOICE YOUR MARKET, OPTIONS, THOUGHTS, AND QUESTIONS. EMAIL 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.
