Commodity TRADING SCHOOL
COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 11/19/09
SUMMARY OF UPCOMING DATA 11/20/09
NO MAJOR ECONOMIC RELEASES
DATA RESULTS 11/19/09
US JOBLESS CLAIMS (505 K)
US LEADING INDICATORS (0.3% VS 0.4% EXP)
PHILDELPHIA FED SURVEY (16.7)
EIA NAT GAS (+20 BCF)
US 2, 5, 7 YEAR NOTES ($44, $42, $32B)
US DEBT REVIEW AND OUTLOOK
US TREASURIES rallied on a global pullback in equities as risk aversion took hold of trader sentiment for the second session. The short end of the yield curve gained more on a percentage basis, as the perception that hopes for global economic recovery may have moved too far ahead of sustainable growth.
Treasuries shrugged off today’s announcement of $118 billion of new Treasury debt coming to auction next week. US leading indicators came in slightly lower than expected, while a downgrade on the technology sector and a report that home foreclosures in the US hit another record high stimulated some flight to security, particularly in the short end of the yield curve, as traders seek to keep cash working in fluid instruments best suited to take advantage of the low interest rate environment expected to remain in place well into 2010. The long end of the curve ended off its best levels of the session as equities appeared to find some late session support.
Technically, looking for Treasuries to maintain a bullish tone in the near term, as US 30 year futures could make another attempt to test 121-19. Expect resistance to hold at this level, then pullback initially to 120-27, with downside target of 120-02.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES fell for a second session on Thursday, as the global equity markets developed a sour stomach with regards to risk exposure. Despite data that came in relatively in line with expectations, equity traders across the global decided to reign in risk exposure for a second session.
US market sentiment was gloomy from the beginning of today’s session, reeling from hangover pressure from the Asian and European equity markets. Technology stocks led stocks lower today after a Bank of America analyst report downgraded the semiconductor sector. In addition, US home foreclosures posted another record, with prime mortgages reaching a record level of default.
The reading placed further doubts on where in the recovery cycle the world’s economies may actually be. Energy stocks also came under pressure as crude oil fell nearly 2.5% as the US dollar recovered ground on risk aversion and uncertainty. Stock prices could recover though, as the uncertain tone of the market (which traders often feel compelled to sell into) includes the question of whether this pullback represents a true correction or merely short term profit taking before possibly rebounding higher. Stay nimble and don’t be quick to judge based on trading this time of year.
Technically, December S&P futures closed near the 1093.00 support level. Key level to watch will be 1084.00, which if broken could set market up for a test of 1075.00. Near term, contract could recover to 1098.00, with 1113.00 representing a key resistance level that if broken, could set up for move to 1119.00.
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US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CLOSE |
CHANGE |
|
US Z9 (US 30 YRS) |
120-17 |
121-11 |
120-14 |
120-26 |
+10/32nds |
|
SP Z9 (S&P 500) |
1100.00 |
1100.50 |
1086.50 |
1094.30 |
-14.20 |
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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.
