Overnight, Chinese bank officials raised their banks’ reserve requirements by 0.5% in an effort to head off inflation and reel in bank lending. Recent signs of increasing economic growth are raising inflation fears. Elsewhere, Greek credit spreads are under renewed pressure as EU officials wrestle with the Greeks about their budget projections and ways to dig the Greeks out of their hole. Earnings season started with a thud as Alcoa’s earnings were disappointing and Chevron gave a profit warning. Are we getting to the time when corporations need to start showing increasing revenues to drive earnings? Cost cutting can only take them so far. This morning we get the US trade balance for November (exp. -$32.9 bln.) then results from a 3 yr. T Note auction at Noon. The USDA Releases a big report at 7:30 – a more accurate accounting of the size of last year’s corn and soybean crops, and an estimate of winter wheat planted acreage. If we get a poor earnings season and China works to slow their economy, what will be the world’s economic growth driver?
March S&P: As expected, yesterday’s doji gave us a selloff today. The next profit target is at a trend line around 1128.25.
March NASDAQ: Couldn’t clear resistance at 1892; 1865 is the first downside target.
March Dow: Broke Fib support at 10537; testing trend line support at 10519.
March T Bonds: Rallying out of a breakout setup (ID/NR7 and doji). Last week’s high at 116-05 is the first upside target.
March Yen: Cleared resistance at 1.0888; last week’s high at 1.0964 is the next rally target.
March Euro: Sell short day; the downside target is 1.4403.
March British Pound: By the Taylor count today would be a Sell Short day; but yesterday’s low large close softens that signal. Held Fib support at 1.6039 overnight; yesterday’s high at 1.6188 is resistance.
March Canadian Dollar: Testing trend line support at 9651; breaking that could lead to a test of the 9600 area.
Feb. Gold: Sell short day; the Fib level at 1151.40 is the reference price for a SS. 1141.30 is the first objective for a selloff.
March Silver: Also on a Sell short signal; support is at 18.50 then trend line support around 18.42.
March Copper: Yesterday’s doji gives today a breakout setup. Friday’s low at 339.15 is the downside breakout point; 334.50 is the first downside objective.
March Cocoa: Sell short day; failed to hold a little trend line at 3329 today. The 3300 area is important support.
March Sugar: Buy day; regaining broken Fib support at 27.03 is the key for the bulls.
March Coffee: Yesterday was the Sell short day; watch trend line support at 143.70. 142.65 is important support.
March Cotton: Yesterday’s big rally looks like a Buy and Sell day combined; so today could be the Sell short day. 74.60 is Fib resistance, and 73.46 is support.
Feb Crude Oil: The 81.80 area is a pivot point (resistance, then support). It looks like it’s making a big double top with the Oct. ‘09 high.
Feb. Natural Gas: Couldn’t regain old low support at 5.505 last night. 5.314 is the next downside objective after yesterday’s low of 5.371.
Feb. Live Cattle: Today is a “cover breakout sales” day; holding trend line support at 84.96 could make it a Buy day.
Feb Lean Hogs: Not seeing the bounce that cattle did from its breakout sale yesterday. 65.90 is Fib support.
Grains comments subject to change post USDA report
March Soybeans: By the Taylor count today should be a Buy day. Yesterday’s low at 1005-6 is the reference price, and the 12/22 low at 992-2 is the next downside support. There’s short term trend line resistance at 1017-4; next resistance areas are 1024 then 1034.
March Wheat: It’s a Sell short day. There’s trend lien resistance at 574-4, and the first objective for a selloff is 560.
March Corn: Yesterday’s doji has us anticipating a directional move today. Overnight it broke under support in the 414 area (old lows, trend line at 414-4). If it turns around, 425 is the key upside price level.
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
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