FuturesCom Bi-Weekly Investment Outlook # 428 August 10 2013 SP500 and Equity Indices • Bonds • Currency Trading • Forex • Precious Metals • Energy • Grains • Livestock • Coffee • Sugar • Cocoa • Cotton. Free Two Week Trial see https://futurescom.com/free-trial-2
Saturday August 10, 2013
4:00 AM South Florida Beach Time
During ‘The Dog Days of August’ trading volumes in many markets often decline while volatility in price increases. World leaders and politicians have closed up shop for the summer. Traders should stay tuned for additional flashes and updates for all markets. The Stock market continued to move a bit higher in a range-bound fashion into the end of July and has acted sloppy against upper levels of resistance. Recent babble shows uncertainty as to when the Fed will begin to taper and who will be the next Fed Chairman. Stock and Index Traders should remain nimble and look for increased volatility ahead over the next two months in preparation for October and November. Typically the best times for buy and hold strategies in equities. Long term yearly technical patterns for US Stock Index Averages remain friendly however recent action has been sloppy. Long Term technical work for 30 Year U.S Treasury futures remain bearish however the near term is mildly friendly. Aggressive traders can buy on a dip and or remain mildly long. Look to sell a sharp rally for December futures later.
Late last week Chinese industrial production was seen as a friendly for commodities and related assets. French Industrial Production came in weaker than expected last week. The long term charts are improving for the CAC-40 and investors can begin to nibble on weakness and be long. Previous issues of Bi-Weekly Outlook have gone over some overseas markets long term. If you need detailed analysis regarding overseas equity markets, please call the office or email a request.
The US Dollar has seen erosion and the Euro is pressing against the 13340 to 13460 region. German economic data and a glimpse of improvement in Italy and Spain have helped stabilize the Euro currency during a period when typical dollar weakness is common. However EU debt problems are not over and the long term remains negative. A weaker Euro is eventually positive for exports and the EU finance ministers know it. Foreign exchange traders should continue to consider the Japanese Yen futures as a trading affair. Long term spot USD/JPY remains bullish, bearish for Yen Futures. The BOJ held off on additional easing measures at last week’s meeting, however none was expected. Forex traders should begin to nibble on the Spot Dollar /Yen and Sell Futures for trading purposes. Cable is range-bound trading affair, recent action after the BOE meeting is a clear example. Friday’s UK Trade data came in as expected and is supportive. Canadian job data on Friday was deemed negative and the Canuck sold off then bounced back. Traders should prepare for a two way trading affair for the Canuck. The Aussie Dollar has bounced. Lower prices are likely to be in front of the market after the recent strength stalls. However unless the Aussie pulls back we will exit the short September futures and take the loss.
Crude acted lousy early last week, especially with all the Fed tapering chatter. Prospects for an increase in Chinese demand along with pipeline issues helped crude oil recover nicely on Friday. A stable recovering US economy and geopolitical uncertainties are supportive. Weather can also come into play during the peak tropical weather season directly ahead. Crude Oil prices have at times not peaked until late August and September. Over the long term prices can accelerate and investors and traders should not be surprised to see higher prices. Heating Oil prices can firm into the end August and beyond. Unleaded gas is a trading affair and traders should trade it from both sides to take advantage of price volatility. Gold and silver along with Copper are showing some recovery. Precious metals are volatile and lower on the year. Look for more volatility in gold and silver. Traders should buy a dip in silver to re-establish last week’s long position.
Soybeans and its products tend to grind lower until autumn harvest. Corn and Soybean focus may eventually shift to weather again and possibilities for an early freeze. On Monday the USDA will release its monthly supply demand report. The average guess for soybean 12/13 ending stocks is near 125 million bushels, 13/14 ending stocks are expected be near 265 million bushels, down from 295. Soybean production is thought to be just under 3.34 billion bushels, from 3.42 in July. World ending stocks for 13/14 are expected to come in near 73.6 million tonnes, down from the July forecast of 74.12 million. Corn production is expected to be a bit under 14 billion bushels. World ending stocks in corn are expected to be a bit above 151 million tonnes. Corn has been weak and numerous surprises can create volatile trading activity. Corn is a trading affair for now. Wheat 2013/14 ending stocks are expected to be 573 million bushels, down 3 million from the July report. Global ending stocks for wheat are estimated at 171.84 million tonnes, down slightly from 172.38 in July. Chicago Wheat typically makes its lows around this time frame and grinds higher into autumn.
Stay tuned Grain flashes.
Live Cattle rose sharply last week after Tyson foods told producers it will not accept Cattle with the hormone Zilmax. Needless to say, once the news came out Live Cattle traded up the limit. The hormone adds about 30 pounds to the weight of cattle during the last few weeks before slaughter. Remain long and buy dips. Lean Hogs are a trading affair, October and December Hogs typically tend to grind lower into autumn. December Hogs normally bear the brunt of down moves. Traders should sell Dec Hogs on a rally and remain short or sell a rally in October hogs for trading purposes and stay tuned for flashes.
U.S. coffee consumption tends to rise in the winter and should aid coffee later in late fall and early winter. Recently announced Brazil price support programs for farmers should be construed as friendly. Do not be surprised to see additional government action to increase domestic coffee demand. Additional programs would have a positive effect the economy and help alleviate domestic unrest ahead of planned world events in the near future. Traders can probe the long side and look for perhaps higher prices into late winter and early spring. Cocoa had a huge run up and is up on the year, it should considered a trading affair with a broad range on top of 2758 to 2775 and on downside buying regions can come in at 2322 to 2315. Cocoa is overbought and dip cannot be ruled out, but it is now higher on the year and that’s friendly in a broader sense. Seasonally Cocoa can dip into later September and October. Mid-crop harvest in the Ivory Coast has slowed a bit in recent weeks, port arrivals for July 29th to August 4th were the lowest April.
Sugar has been supported by lower production estimates in Brazil and the country’s shift to more ethanol production. The Brazilian government revised their estimate for 2013/14 sugar production to a record 40.97 million tonnes which is down from 43.56 million projected in April. Supplies are still large, up from 38.34 million last year. Notably the downward revision was made prior the freeze during late July. Cooler and wet weather in Brazilian growing regions may provide some support. Sugar supplies are still large and continue to overhang market. The International Sugar Organization world supply estimates are for a surplus of 3.5 million tonnes down from last year’s 11.2 million surplus, those numbers can narrow in our view. Seasonally sugar tends to bottom in August thru September and acts better into year end. Traders should not be surprised to see more of a range bound trade and higher levels. Cotton is higher on the year and acts better. Old crop ending stocks are fairly tight. On Monday the USDA will release US production estimates. The average guess is for a rise in production to 13.75 million bales, up from 13.5 million in July. This is the smallest US crop since 2009/10. World production is expected to be 118.5 million bales, above the July data of 118.02 million. Global ending stocks for 13/14 are expected to come in at 94.68 million bales, up from 94.34 in July. Record high world inventory of Cotton supplies is negative however Cotton is higher on the year and that’s friendly.
Traders should stay tuned for flashes and updates for all markets
Onto the Nitty Gritty
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 15,350.00 to 15,290.00 and 15,125.0. Below that buyers should appear near 14,960.00 to 14,840.00 and contain a decline.
Resistance should appear near the 15,690.00 to 15,760.00 and the 16,090.00 to 16,160.00 region.
SEPT E-MINI SP500
Resistance should appear near 1689 to 1696
and the1731.00 to 1738.00 region.
Support should appear near 1672.00, a close under is negative and augurs for a test of the 1655 to
1642 region. Below that buyers should appear near 1628.50 and 1615.00 to 1609.00
Traders can buy at 1657.00 for a bounce and stay tuned for a stop.
NASDAQ COMPOSITE
Resistance should appear near 3734.00 to 3743 and should cap a rally.
Support should appear near 3623 to 3613 and 3563.00 to 3553.00 .
SEPT E-MINI NASDAQ 100
Support should appear near 3102.00 to 3092.00 and 3045.00 to 3036.00. Traders can buy at 3045.00 and risk a close under 3031.00 for three days in a row. Below that buyers should appear near 2990.00 to 2972.00. Traders can buy at 2990 and hold for the pull.
Resistance should appear near 3148.00 to 3157.00 region. Where sellers should appear and cap a rally. Beyond that a test of 3194.00 to 3213.00 is likely.
SEPT E-MINI RUSSELL 2000
Resistance should appear at 1047.00 and the 1058.00 to 1068.00 region which should cap a rally
Support should appear near the 1036.00 to 1032.00 region. A close under is negative and augurs for a test of and 1013.60 to 1010.40.
SEPT 30 YR BOND
Resistance should appear near 134-21 and 135-07, a close over is friendly and augurs for a test
135-21, above that sellers should appear near 136-07 and 136-21.
Support should appear near 133-21 and 133-07. Below that a test of 132-21 is likely and should hold for now.
SEPT 10 YR NOTE
Resistance should appear near 127-07 and 127-21. Beyond that sellers should appear near 128-21 and 129-07 which should cap a rally. Above that resistance is near 129-21.
Support should appear near 126-07 and 125-21, below that supports should appear near 124-21.
THE FRENZIED FOREX FRONT
SEPT DOLLAR INDEX
Resistance should appear near 8119 to 8134 and 8194 to 8223.
Support should appear near 8044 to 8029 region. Below that a test of 7954 to 7929 is likely.
SEPT JAPANESE YEN
Resistance should appear near 10470, beyond that sellers should appear near the 10580 to 10680 region and cap a rally.
Support should appear near 10360 to 13020 and 10136 to 10104, below that 10034 to 10021 should hold for now.
SEPT EURO CURRENCY
Support should appear near 13220 and the 13100 to 13040 region.
Nearby resistance should appear near 13400 to 13460, beyond that a test of 13610 is likely
SEPT SWISS FRANC
Resistance should appear near 10960 to 11010, beyond that a test of 11300 to 11360 is likely to occur and should cap a rally.
Support should appear near 10820 and 10750, a slip under is negative and indicates a test of 10680 to 10580 which should hold.
SEPT BRITISH POUND
Support should appear near 15350 to 15290 and 15125. Traders can buy at 15357 and risk a close under 15287 for three days in a row.
Resistance should appear near the 15690 to 15760 region. Beyond that sellers should appear near 16090 to 16150 and cap a rally.
SEPT CANADIAN DOLLAR
Resistance should appear near 9821 to 9837 and the 9921 to 9937 region
Support should appear near 9641 to 9625 and 9546 to 9526 region.
SEPTEMBER AUSSIE DOLLAR
Support should appear near 9156 to 9140 and 9060 to 9044, a close under is negative and augurs for a test of 8964 to 8934.
Resistance should appear near 9237 and the 9316 to 9347 region. Beyond that sellers should appear near 9429 to 9445
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1334 to 1346 and 1377 to 1383.
Support is near 1310 to 1304 and the 1274 to 1268 region.
SEPTEMBER COPPER
Resistance should appear near the 33190 to 33280 and 33770 to 33860. Beyond that sellers should appear near 34250 to 34430 which should cap a rally.
Support should appear near 32750 to 32610 and the 32130 to 31940 region, failure there augurs for a test of 31570 to 31480.
SEPTEMBER SILVER
Resistance should appear near 2080 to 2089. Beyond that sellers should appear near 2126 to 2134 and the 2170 to 2185 region.
Support is at the 2032 and 1996 to 1982. Traders can buy at 1997 for a bounce and stay tuned for a stop. Below that buyers should appear near 1953 to 1946.
THE EXCITING ENERGIES
SEPT CRUDE OIL
Resistance should appear near 10680. A close over is friendly and augurs for a test of 10815 and eventually the 10960 to 11010 region.
Support should appear near 10470 and 10360 to 10320. Below that buyers should appear near 10136 to 10104 and the 10037 to 10021 region.
Stay tuned for flashes and analysis to roll to October…
SEPT HEATING OIL
Support should appear near should appear near the 29370 to 29280 region. Below that 28830 to 28740 should hold.
Resistance should appear 30360 to 30450, a close over is friendly and augurs for a test of 30920 to 31020 and the 31480 to 31570 region.
SEPT UNLEADED GAS
Support should appear near 28830 to 28740 and the28290 to 28200 region.
Resistance should appear near 29280 to 29370 and 30360 to 30450.
SEPT NATURAL GAS
Resistance should appear at 3319 to 3328 and 3425 to 3443, a close over is friendly and augurs for as test of the 3613 to 3623 region, where sellers should appear near and cap a rally.
Support should appear near 32130 to 31940, below that buyers should appear near 3157 to 3148 and 3102 to 3092 which should hold.
THE GRANDE’ GRAINS
SEPT SOYBEANS
Support should appear near 1203 to 1192 and 1169 to 1164. Below that buyers should appear near 1136 to 1130.
Resistance should appear near 1232 to 1238, beyond that a test of 1268 to 1274 and the 1304 to 1310 region is likely.
NOV SOYBEANS
Support should appear near 1169 to 1164 and the 1136 to 1130 region. Below that buyers should appear near 1101 to 1096 and contain a decline.
Resistance should appear near 1192 to 1203 and the 1232 to 1238 region. Beyond that sellers should appear near 1268 to 1274 and cap a rally. Trade accordingly.
DEC SOYOIL
Resistance should appear near 4304 to 4315 and the 4370 to 4381 region.
Support should appear near 4056 to 4046 and the 3992 to 3982 region.
DEC SOYMEAL
Resistance should appear near 373.4 to 374.3 beyond that sellers should appear near 385.8 to 386.7and cap a rally.
Support should appear near 344.3 to 342.5 below that buyers should appear near 338.8 to 337.7 and the 327.0 to 326.1 region and contain a decline.
SEPT CORN
Support should appear near 451 ½ to 450 ¾ and 446 ¾ to 442 ½. Below that buyers should appear near the 438 ¼ to 437 region.
Resistance should appear near 477 ½ to 478 ½ and the 491 ½ to 492 ¾ region. A close over is friendly and augurs for a test of 505 ½ to 506 ¾.
DEC CORN
Support should appear near 444 ¾ to 442 ½ and the 431 ¼ to 430 ½ region. Below that buyers should appear near the 418 ¼ to 416 ¼ region.
Resistance should appear near 463 ¾ to 465 and 477 ½ to 478 ¾, a close over is friendly and augurs for a test of 484 ½ to 485 ¾.
SEPT WHEAT
Resistance should appear near 641 ¾ to 643 then 648 ¾ to 650 ¾ and 665 ¾ to 667 ¼.
Support should appear near 627 to 625 ¾ and 619 to 616 ½.
DEC WHEAT
Resistance should appear near 657 ¾ to 659 ¼ and 665 ¾ to 667 ¼. Beyond that a test of 674 ¾ to 675 ½ is likely.
Support should appear near 643 to 641 ¾ and the 635 to 633 ¾ region.
THE LIVELY LIVESTOCK
OCT CATTLE
Support should appear near 12680 then 12607 and 12537. Traders can buy at 12612 and hold for higher prices. Below that buyers should appear near 12447 and the 12380 to 12320 region.
Resistance should appear near 12740, a close over is friendly and augurs for a test of 12817. Beyond that sellers should appear near 13040 to 13100.
OCT HOGS
Support should appear near 8407 to 8392 and the 8317 to 8302. Below that a test of 8222 to 8192 and the 8047 to 8027 region is likely and should contain a decline.
Resistance should appear near 8487 to 8502 a close over is friendly and augurs for a test of 8557 to 8587 and the 8667 to 8682 region. Traders can sell at 8662 and risk a close over 8692 for three days in a row.
DEC HOGS
Support should appear near 8137 to 8117 and the 8048 to 8027 region. Below that buyers should appear near 7957 to 7932.
Resistance should appear near 8192 to 8222 and the 8300 to 8317 region. A close over is friendly and augurs for a test of 8392 to 8407 which should cap a rally. Traders can sell at 8392 and hold for lower prices.
THE SATISFYING SOFTS
DEC COFFEE
Support should appear near 12380 to 12320 and the 12030 to 11920 region. Below that a test of 11690 to 11640 is likely. Failure there augurs for a test of 11360 to 11300 and should contain a decline.
Resistance should appear near the 12680 to 12740 region. A close over is friendly and augurs for a test of 13040 to 13100 and the 13340 to 13460 region.
DECEMBER COCOA
Resistance should appear near 2511 to 2519 and the 2552 to 2588 region. Beyond that sellers should appear near the 2612 to 2620 region and cap a rally. Traders can sell at 2611 and risk a close over 2621 for three days in a row.
Support should appear near 2469 to 2461 and the 2419 to 2411 region. Below that buyers should appear near 2370 to 2354. Traders can buy at 2377 and hold for higher prices.
Stay tuned for Flashes
OCT SUGAR
Resistance is near 1731 to 1738 region, beyond that a test of 1774 to 1780 is likely.
Support should appear near 1696 to 1689 and the 1655 to 1652 region. Traders can buy at 1673 and risk a close under 1641 for three days in a row.
DEC COTTON
Support should appear near 8777 to 8762 and the 8683 to 8668 region. Below that buyers should appear near 8589 to 8569. Traders who have ice running thru their veins can buy at 8590 and risk a close under 8299 for three days in a row.
Resistance is 9044 to 9060 and 9140 to 9156. A close over is friendly and augurs for a test of 9316 to 9347 and beyond.
Stay tuned for Flashes and Updates in all Markets
–A Ship in Harbor is Safe…But that is not what ships are built for –
Happy Trading!
Bill wil@futurescom.com
Saturday August 10, 2013 11:30 PM South Florida Beach Time
THIS PUBLICATION IS SUBJECT TO REVISIONS AND CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES AND FOREIGN EXCHANGE TRADING IS RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS, FOREIGN EXCHANGE AND OPTIONS. TRADING FUTURES AND FOREIGN EXCHANGE ON MARGIN CARRIES A HIGH LEVEL OF RISK AND MAY NOT BE SUITABLE FOR ALL INVESTORS. PLEASE TRADE WITH CAPITAL YOU CAN AFFORD TO LOSE. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. NO SOLICITATION IS MADE HERE FOR INDIVIDUALS TO BUY OR SELL FUTURES CONTRACTS, FOREIGN EXCHANGE OR OPTION MARKET. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY. READERS ARE SOLEY RESPONSIBLE FOR HOW THEY USE THE INFORMATION AND FOR THEIR RESULTS. YOU SHOULD BE AWARE OF ALL THE RISKS ASSOCIATED WITH FUTURES AND FOREIGN EXCHANGE AND SEEK ADVICE FROM AN INDEPENDENT FINANCIAL ADVISOR IF YOU HAVE ANY DOUBTS, THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN FUTURES AND FOREIGN EXCHANGE TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. INTERNET RISKS ; THERE ARE RISKS ASSOCIATED WITH UTILIZING AN INTERNET BASED SERVICE INCLUDING BUT NOT LIMITED TO, FAILURE OF HARDWARE, SOFTWARE AND INTERNET CONNECTION, FUTURESCOM EMPLOYS BACK-UP SYSTEMS AND CONTINGENCY PLANS TO MINIMIZE THE POSSIBILITY OF SYSTEM FAILURE
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