Commodity TRADING SCHOOL
COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 11/23/09
SUMMARY OF UPCOMING DATA 11/24/09
8:30 AM; US GDP (09 3RDQ) 2.8%
10:00 AM; US CONSUMER CONF (47.0)
10:00 AM; FHFA HOUSE PRICE INDEX
1:00 PM US 5 YEAR NOTE AUCTION
2:00 PM FOMC MINUTES
DATA RESULTS 11/23/09
¨ US EXISTING HOME SALES (6.1 M)
¨ US 2 YEAR NOTE AUCTION ($44B, BID TO COVER 3.16, YIELD AWARDED 0.802%)
US DEBT REVIEW AND OUTLOOK
US TREASURIES traded mostly lower on Monday’s session, rebounding to close near unchanged. The rebound was supported by a general sentiment of caution prevailing during the shortened Thanksgiving trading week as well as a relatively well received, though not overly inspiring record 2 year Treasury auction. The strong bid to cover of 3.16 failed to surprise most traders and come at the expense of a slightly higher than expected yield (0.802%).
Overall, the pattern of traders supporting the short end of the yield curve for security at least into the end of 2009 appears to be remaining intact. In addition, a report that corporate debt sales have reached the levels preceding the collapse of Lehman Bros, suggests that bond buyers will likely with longer term capital to work in corporate, rather than lower yielding Treasury instruments. Wednesday’s US 7 year auction may offer further insight into this theory, as debt further out on the yield curve may find significantly less demand, particularly going into the holiday season.
Technically, US 30 year futures should range trade for near term, as end of the year portfolio buying should offer some support to prices. Market should find initial resistance at 121-08, where it should retreat back to the 119-28 level. Look for downside momentum to allow for test of 119-06. Significant upside resistance sets up at 122-02.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES began the shortened trading week with a strong gain, yet the major indices closed well off their highs of the session. Enthusiastic buying took place across nearly all equity sectors, after reports showing a greater than expected number of existing homes were sold in October- the highest in 2 ½ years. In addition, comments from two Federal Reserve presidents suggested that the current, near zero US interest rate policy should be kept in place well into 2010. These comments refueled selling of the US dollar and rallied risk and yield seekers across all the major equity indices. Most of the leading sectors (technology, material, energy) which rallied in the early session retreated as the US dollar appeared to find some ground (its comments- not policy) and traders appeared more inclined to hold off on placing big best this week, seeking shorter term gains as the end of the year pullback in trading volume appears ready to begin.
Technically, Dec S&P futures closed near the high end of its recent range. Look for strong resistance at 1113.00, with a break of this level setting up a test of 1121.00. Support sets up at 1094.00, with a break of this level possibly setting up downside targets of 1089.00 and 1082.00.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CLOSE |
CHANGE |
|
US Z9 (US 30 YRS) |
120-24 |
121-01 |
120-01 |
120-29 |
+1/32nds |
|
SP Z9 (S&P 500) |
1089.75 |
1111.50 |
1089.00 |
1103.75 |
+14.00 |
|
|
|
|
|
|
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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.
