Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 07/21/09

SUMMARY OF DATA 07/22/09

  • 10:00 AM FED CHAIR BERNANKE BEGINS 2nd DAY OF TESTIMONY.
  • 10: 30 AM EIA INVENTORY REPORT (CRUDE, PRODUCTS, CAPACITY UTILIZATION)

DATA RESULTS 07/21/09

FED CHAIRMAN BERNANKE BEGINS TESTIMONY

DEBT MARKETS RUN HIGHER. EQUITIES TRADE MIXED AS MARKETS CONTEND WITH STRONG EARNINGS, TESTIMONY FROM FED CHAIRMAN THAT LOW RATES TO BE WITH ECONOMY FOR “EXTENDED TIME.

US TREASURIES were off to the races after a consolidation overnight. Yields dropped to their lowest levels in nearly a week after testimony from Federal Reserve Chairman Bernanke suggested that the US economy is showing signs of stabilization and that US fiscal policies will continue to support low interest rates for an “extended period”. The markets seemed to perceive this in the near term as a possible opening of alternative strategies designed to support credit liquidity and fiscal stimulus in the longer term. What could these be? Stay tuned for part 2 tomorrow for possible answers. If the answers do not appear, it would be likely that Treasuries stage a pullback between now and Friday in preparation for the next round of record breaking debt auction hitting the market. That flow is unlikely to slow down throughout 2009.

Equities range trade throughout the session as a surprisingly strong earnings reading from Caterpillar and the suggestion of recession migration from Bernanke’s testimony clashed with renewed concerns about CIT being unable to avoid bankruptcy. While equities close near the highs of the session, several rounds of profit taking at or near 2009 highs suggest market may be getting ready for a pullback going into next week.

TECHNICAL OUTLOOK-US 30 YEARS- US 30 Treasuries topped out at protected spike target of 118-160 on Wednesday. If there is a lack of follow through buying on the overnight session, look for the market to range trade in a tight range with slightly upward basis in the near term. Support should form at 116-240, while levels of resistance should form near a test of 119-010. Look for the market to channel in a tighter range before developing momentum to break back toward target of 115-150.

EURODOLLARS- December Eurodollars touched up to next level of resistance at 99.310. March contracts are narrowing the gap, gaining slightly more on the today. Still believe time is on the side of the shorts, with December contract setting up for pullback to initial support of 99.140.

S&P 500- S&P 500 futures fell back to support range of 940.00. Market’s strong close suggests that some possible upside remains before overdue correction. Look for a test of 957.00 before pullback to higher low of 942.00. Believe there will be a brief series of higher lows before market can break through test of 932.50. If this level holds, look for market to rebound key resistance at 962.00.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US U9 (US 30 YRS)

116-250

118-160

116-000

118-105

+1-04/32nds

TY U9 (US 10 YRS)

116-270

118-010

116-145

117-250

+25.0/32nds

ED Z9 (EURO $)

99.265

99.310

99.240

99.290

+2.50

SP U9 (S&P 500)

954.00

954.50

939.70

953.40

+4.40

Prepared by Rich Roscelli & Paul Brittain.

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. Whitehall Investment Management, 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.