Commodity TRADING SCHOOL
COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 11/05/09
SUMMARY OF UPCOMING DATA 11/06/09
8:30 AM US NON FARM PAYROLL (-175,000K), UNEMPLOYMENT (9.9%)
10:00 AM- US WHOLESALE TRADE (-1.0%)
DATA RESULTS 11/05/09
US WEEKLY JOBLESS CLAIMS (512K vs.523K)
US PRDUCTIVITY, UNIT LABOR COSTS (9.5% vs.6.3%,-5.2 vs. -3.9%)
EIA INVENTORY (NAT GAS) 29 BCF
US DEBT REVIEW AND OUTLOOK
US TREASURIES traded in a lackluster session after rebounding on short covering overnight. Traders remained on the sidelines for most of the session in anticipation of Friday’s US nonfarm payroll and unemployment figures. Expectations are calling for a loss of -175,000 jobs and the unemployment rate to tick up to 9.9%. The sentiment going into the figures seem to reflect a tone of cautious optimism, pressuring gains in fixed income.
Recovery in Treasury prices appeared to be capped in the near term. Weekly US jobless claims came in lower than expected and readings on US labor productivity and costs posted their best figures in nearly three years. In addition, strong earnings and an upbeat forecast from Cisco systems helped to rally equities amid growing sentiment that economic recovery may be finding some legs within the ongoing cycle. Some bond traders feel that Treasuries may begin to find some support in the upcoming weeks, as interpreted by the Federal Reserve’s stance that it will not seek to increase interest rates without increases in employment and inflation. This fiscal policy, combined with the normal purchases of Treasuries by portfolio managers for annual asset allocation readjustments, may offer some near to medium term support in the complex. The “buy on dips” strategy may gain a greater focus at the very least.
Technically, December 30 year futures changed very little, hitting near their recovery resistance level of 118-24 (had been looking for 118-28). Possible increase in volatility allow for upside resistance levels of 119-04 and 119-10. Support for treasuries forms at 117-25, with 117-03 remaining as downside target.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES rebounded on Thursday, closing near the highs of the session, as strong earnings and guidance by Cisco Systems, coupled with better than expected readings on US weekly unemployment claims and productivity supported a cautiously optimistic sentiment for equity buyers.
The technology sector was the primary driver of today’s rally, which allowed the Dow to move back above the 10000 level and powered the NASDAQ to the position of highest percentage gainer of the three major indices. The homebuilding sector received a boost as the US government will extend the homebuyers tax credit and unemployment benefits. The credit would be extended for seven months and will now include an additional tax credit for qualified individuals that already own homes, as the market tries to bolster purchases by “step up” buyers of homes in an effort to stimulate drawdown of higher priced real estate.
Technically, Dec S&P futures are coming up toward resistance at 1071.00. A break of this level should set up for test of 1083.00. 1103.00 continues as an upside breakout target level. Adjust initial downside support level to 1035.00. 1022.00, 1007.00 continue as key downside target levels.
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US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CHANGE |
|
|
US Z9 (US 30 YRS) |
118-09 |
118-24 |
117-31 |
118-08 |
+5/32NDS |
|
SP Z9 (S&P 500) |
1051.20 |
1064.00 |
1049.60 |
1063.20 |
+16.20 |
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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.
