Commodity TRADING SCHOOL
COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 09/15/09
SUMMARY OF UPCOMING DATA 09/16/09
8:30 AM US CONSUMER PRICE INDEX (0.4% EX # 0.1%)
9:15 AM US INDUSTRIAL PRODUCTION, CAPACITY UTILIZATION
10:30 AM EIA INVENTORY REPORT (CRUDE OIL)
1:00 PM HOUSING MARKET INDEX
DATA RESULTS 09/15/09
RETAIL SALES (2.7) US PPI (PRODUCERS PRICE INDEX) (1.7%, EX FOOD/ENERGY 0.2%) EMPIRE STATE MANUFACTURING SURVEY (18.8)
10:00 AM US BUSINESS INVENTORIES (-0.9%)
US DEBT REVIEW AND OUTLOOK
US TREASURIES continued into negative territory on Tuesday. Government debt prices had to deal with three strikes against them regarding data releases. US retail sales and readings on manufacturing posted their highest monthly gains in nearly two years, while prices on the wholesale level jumped more than expected today increasing pressure on lower yielding fixed income assets. In addition, comments from Federal Reserve chairman Ben Bernanke that the worst of recession is behind most global economies additionally dampened interest in US government debt.
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 broke through Monday’s initial support level of 119-07 and should find strong support at 118-08. Additional movement down should be checked by some short covering adherent to quadruple witching. Market should fill in gap left from 119-28 before regaining downward momentum. Should this level fail, momentum should allow Dec Treasury prices to try for a downward test of 117-28.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES ended the day in positive territory, supported by recovery supportive economic data and upticks in M and A activity. Gains in the major indices continue to be achieved with a sense of caution as the markets appear vary of a fast moving correction that seems overdue.
A majority of the recent sector leaders posted gains today. Energy and material stocks were among the leaders as commodities posted strong gains across the board. Technology stocks moved higher on reports that Adobe Systems would acquire Omniture Software for $1.8 billion. Financials remained relatively quiet after a report this morning revealed that Citigroup was in talks with the Federal Government to reduce its stake in the banking institution. Shares fell due to the realization that Citigroup would need to find additional funds, most likely from private equity.
Equities received an additional boost from Federal Reserve Chairman Bernanke who cautiously stated in a conference today that the US recession is likely over. All of this good news failed to spur equities to push beyond technical resistance levels, as sentiment seems to be building that all of the good news has essentially been factored in and that the markets are now looking for a catalyst to initiate an seemingly overdue price correction.
In addition, many analysts noted that for many of these positive indicators, there is a corresponding negative when one examines many of the indicators on a longer term basis.
Retail sales, for example, had their biggest monthly rise since 2006. However the year over year measure shows consumer consumption down over 6%.
Technically, December S&P futures failed to break significantly through its up target level at 1049.00. While daily RSI indicators continue to display the market in overbought territory, shorter term indicators show the market may have the ability to continue to test higher, particularly if the market establishes a pattern of higher lows. Upside target on Dec S&P futures sets in at 1053.60. Market expected to trade between this high and the 1043.75 price level. At this initial support level, look for a break through to 1042.75. This could signify the initiation of a correction, with support at 1036.50 and 1028.00 lining up as significant breakout support levels. Remember that Thursday is quadruple witching day, so expect extraordinary high levels of volatility.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CHANGE |
|
|
US Z9 (US 30 YRS) |
119-24 |
120-23 |
118-27 |
119-06 |
-21/32nds |
|
SP Z9 (S&P 500) |
1044.50 |
1051.90 |
1038.60 |
1045.90 |
+2.40 |
|
SP U9 (S&P 500) |
1049.00 |
1056.50 |
1043.00 |
1050.30 |
+2.40 |
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.
