FuturesCom Bi-Weekly Investment Outlook # 431 September 22 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
Courage in a Speculator is merely confidence to act on the decision of his mind.
Saturday September 21, 2013
6:00 AM South Florida Beach Time
Investors and traders will be looking for direction from votes in the U.S. Congress over the debt ceiling and a possible U.S Gov’t shut down as month-end and quarter- end looms ahead. The ‘babble’ should be thick and constant. Traders should stay nimble and tune in for Flashes and Updates. All U.S Stock Indices remain higher on the year and at or near all-time highs along with critical resistance levels, in the NASDAQ’s case, not all-time highs but a 13 year high. Equity valuations have hit the highest levels in nearly four years. Index traders should look for increased volatility in preparation October and November which is still typically the best time of the year for Buy and Hold strategies. The Transports enter a historically favorable seasonality at the beginning of October and it runs until May. If the pickup in Chinese growth and exports continues it can translate over to the transportation sector. Seasonal strength in the consumer sector during the holiday season can also help the transportation sector. Consumers are a big part of the U. S economy, 70% of U.S GDP comes from consumers.
Considering this, analysts who are predicting U.S. Federal reserve tightening during December with some kind of major announcement may not be using common sense. Perhaps tightening will come slowly without notification and the Fed will simply try to adjust their purchases downward in a fashion to avoid the least amount of attention. Long term yearly technical patterns for U.S. stock index averages remain friendly. Long term U.S Treasury Futures remain bearish, however they can back and fill with a bit of a rally. Detailed analysis regarding overseas equity or foreign exchange markets into the fourth-quarter and end of the year are available. For more information please call the office or email a request.
Foreign exchange traders should continue to treat Japanese Yen futures as a trading affair. Long term spot USD/JPY remains bullish (bearish for Yen Futures). Traders and investor emphasis should now be accumulation on the long side for spot dollar-yen and continue to nibble on dips. Futures traders should sell rallies in Dec Futures and remain short.
The Euro closed Friday solidly up on the year as the U.S. Dollar erosion continued. Look for talk from Eurozone officials to stall or mitigate an excessive rally in the Euro. The German election results on Monday will be something to watch to see what the makeup of German government coalitions will be. Additionally ECB President Draghi will have a regular hearing before the EU Parliament. Lately ECB Council members and finance ministers of various countries have talked down rate expectations.
The Cable and Swiss Franc pushed up against resistance and both are nearly unchanged on the year. The Canadian Dollar and Aussie Dollar also moved higher over the last few weeks but remain down on the year. After the recent positive action the Kiwi is now higher on the year. Look for Central bank and Government officials for comments regarding Forex markets. Each country and in the case of the Euro ‘a region’ will be tending to its own monetary policy. Stay tuned for Forex Flashes.
Crude Oil ended last week on a weak note and is on the year near $ 1.04, a level near what some analysts believe the cost for new barrels of US Shale Oil sits at. Investors and traders should expect a wide range of prices. Front-end Natural Gas is slightly higher on the year and should attract some buyers just below current price levels. Heating Oil is lower on the year and chopping both sides of unchanged and unleaded gas is doing the same. Gold and Silver along with Copper have had wide ranges with barely any recovery in prices and remain well lower on the year and year over year. Precious metals are volatile and traders should expect more volatility in gold and silver and stay tuned for flashes.
Soybeans have been weak and under harvest pressure, Corn is sideways and is pressured by harvest. Wheat acted better then gave up its gains and has been stuck in a trading range. Seasonally the peak for wheat is still in front of the market. A poor crop in Argentina may help exports of U.S wheat. Concerns are starting to show up regarding the quality of the Russia wheat crop, considering the Russian government is supporting a nation that tossed sarin gas at its residents, why trust the food out of Russia itself ! Unintended consequences have a habit of spreading.
After the close Friday the USDA Cattle on Feed Report showed smaller than expected august cattle placements in U.S feed-yards on Sept. 1. Placements in August were under the average guess at down 11%, as reduced numbers of young cattle (placements) entered U.S. feed-yards in August versus a year ago. The number of ‘head on feed’ as of Sept. 1 was down 7% from 2012. February Cattle Futures should be supported by this news. Retail beef in August set new record highs once again. The average price of choice beef in your grocery store during August was $5.394 per pound, up 44.9 cents from last August and up 3.7 cents from the record in July. The same goes for all fresh beef which was $4.968 per pound up 26.8 cents from last August and up 2.5 cents from July’s record setting price. Cash Hogs prices remain fairly firm. Slaughter for the week was 2.18 million head, down 9.2% versus last year and is the fifth week below the year-ago levels and the ninth week lower than expectations from the June pig report. The Iowa-Minnesota average weight last week was 270.9 pounds up 2.9 pounds from a year ago. Hog Futures drifted lower from lofty a level, are below cash and can firm nicely into the end of the month and early October after some early weakness next week.
Later this year Pig virus issues may be an over-riding factor. As of September 8th there have been 612 confirmed cases of PEDv (Porcine Epidemic Diarrhea virus) in 17 states. Iowa has the most at 181. Lately more suckling and nursery pigs have been impacted from this disease. PEDv has a high mortality rate for baby pigs. The impact may begin to show up in the USDA Hogs and Pigs report next week with reductions ‘later on’ possibly out in the December to February time frame. The worst case scenario is a 3 or 4% decline in production down the road from last year. Traders should look for the spread in price between April hogs and December Hogs to widen. Buying April and Selling December may work after October goes off the board as ‘nearby’ increasing supply issues should prevail for a bit.
Stay tuned for Updates and Flashes. In the mean time we remain friendly to October and October versus December also. Retail pork prices set record highs in August for the second month in a row.
The average pork price in your grocery store in August was $3.757 per pound, up 23.1 cents from last year and up 12.7 cents from July also a record while at the same time for the third month in a row retail boneless ham prices are higher than boneless pork chop prices, which almost never happens. Consumers love ‘Ham’.
Seasonally coffee tends to act better in September thru November then firm into December and into springtime. We remain friendly for now, however it is lower on the year and lacks any attention. Cocoa is up on the year and should be considered a trading affair with a broad range. The firm reaction from lower levels has sustained a positive tone. West African cocoa regions are in a late precipitation time frame with daily scattered showers and near-normal temperatures in the forecast. The outlook is unlikely to improve the 2013/14 crop unless more than the expected precipitation occurs. If it does rain a lot Black pod disease will be a concern for the Ivory Coast and Ghana. Improving global demand outlooks for cocoa has helped keep prices firm. A stronger British Pound is supportive. Buy a dip in Cocoa.
Sugar is lower on the year. Seasonally sugar tends to bottom in August thru September and acts better into year end. Weather remains supportive to sugar and expectations demand may increase may help sugar into the end of the month and maintain some price stability now that is it off its lows. Cotton is higher on the year, remains near broad based support and continues to be a trading affair as it backs and fills and looks supportive at current levels but unable to sustain rallies. So buying a dip is ok, just do not pay up let it rise on its own. Our selling region is well above the current price region.
Stay Tuned for Flashes in Cotton.
Traders should stay nimble and tune in for Day Trades, BW flashes and Updates for all markets.
Onto the Nitty Gritty…
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near is near 15,350.00 to 15,290.00, a close under is negative and augurs for a test of the 14,960.00 to 14,840.00 region. Below that a test of the 14,590.00 to 14,530.00 is likely and should contain declines.
Resistance should appear near 15,690.00 to 15,760.00. Beyond that a test of 16,090.00 to 16,150.00 is likely.
DEC E-MINI SP500
Resistance should appear near 1713.50 and the 1731.00 to 1738.00 region. Beyond that sellers should appear near 1774.00 to 1780.00.
Support should appear near 1696.00 to 1689.00 and the 1655.00 to 1642.00 region. Below that buyers should appear near 1615.00 to 1609.00. Traders who have ice water running thru their veins can buy at 1657 and risk a close under 1641.00 for three days in a row.
NASDAQ COMPOSITE
Resistance should appear near 3795.00 to 3806.00 and the 3858.00 to 3867.00 region.
Support should appear near 3743.00 to 3734.00 and 3682.00 to 3663.00.
DEC E-MINI NASDAQ 100
Support should appear near 3213.00 to 3194.00 the 3157.00 to 3148.00 region. Traders can buy at 3158.00 and risk a close under 3144.00 for three days in a row. Below that buyers should appear near 3102 to 3092.00 and the 3045.00 to 3036.00 region and contain a decline.
Resistance should appear near 3237.00 then 3261.00 to 3270.00 and the 3319.0 to 3328.00 region
DEC E-MINI RUSSELL 2000
Resistance should appear at 1082.00 and the 1096.00 to 1101.00 region. Beyond that sellers should appear near 1130.00 to 1136.00
Support should appear near 1068.00 to 1058.00 and 1047.00. Below that buyers should appear near the 1036.00 to 1032.00 then 1023.70 and 1013.60 to 1010.40. Traders can buy at 1024.00 and hold for higher prices. Stay tuned for Index Flashes.
DEC 30 YR BOND
Resistance should appear near 132-07 and 132-21. Beyond that sellers should appear near 133-21 and 134-07 which should cap a rally.
Support should appear near 130-21 and 130-07. Below that buyers should appear near 129-21 and 129-07. Under that 128-21 should hold for now.
DEC 10 YR NOTE
Resistance should appear near 125-21 and 126-07. Beyond that sellers should appear near 127-07 and 127-21 where sellers should appear and cap a rally.
Support should appear near 124-21 and 124-07. Below that buyers should appear near 123-21 then 123-07 and 122-21 and contain a decline.
THE FRENZIED FOREX FRONT
DEC DOLLAR INDEX
Resistance should appear near 8119 to 8134 a close over is friendly and augurs for a test of 8194 to 8223 where sellers should appear and cap a rally.
Support should appear near 8044 to 8029, a close under is negative and augurs for a test of 7954 to 7939 and the 7864 to 7836, where buyers should appear and contain a decline. Traders can buy at 7867 and hold for higher prices, risk 50 points.
DEC JAPANESE YEN
Resistance should appear near 10104 to 10136 and 10182. Beyond that sellers should appear near the 10320 to 10360 region and cap a rally.
Support should appear near 10037 to 10021, a close under is negative and augurs for a test of the 9937 to 9921 region. Below that a trade towards 9837 to 9821 is likely. Trade Accordingly.
DEC EURO CURRENCY
Support should appear near 13460 to 13400 and 13340. Below that buyers should appear near the
13220 and contain a decline.
Resistance should appear near 13615 and the 13770 to 13830 region. Traders can sell at 13767 and risk a close over 13837 for three days in a row.
DEC SWISS FRANC
Resistance should appear near 11010 then 11085 and 11155, beyond that a test of 11300 to 11360 is likely to occur and should cap a rally.
Support should appear near 10960, a close under is negative and augurs for a test of 10820 and the 10680 to 10580 region, which should hold.
DEC BRITISH POUND
Support should appear near 15925 and the 15760 to 15690 region. Traders can buy at 15777 for a bounce and risk a close under 15687 for three days in a row.
Resistance should appear near the 16090 to 16150 region a close over is friendly and augurs for a test of 16287 and the 16420 to 16550 region.
DEC CANADIAN DOLLAR
Resistance should appear near 9706 to 9737 and 9821 to 9845.
Support should appear near 9641 to 9625 and 9542 to 9526.
DEC AUSSIE DOLLAR
Support should appear near 9347 to 9316, below that a test of 9237 and the 9156 to 9140 region is likely to occur.
Resistance should appear near 9429 to 9445, beyond that a trade towards 9526 to 9542 is likely.
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1377 to 1383, a close over is friendly and augurs for a test of 1453 to 1459.
Support is near 1310 to 1304 and the 1274 to 1268 region.
DEC COPPER
Resistance should appear near 33770 to 33860. Beyond that sellers should appear near 34250 to 34430 which should cap a rally.
Support should appear near 32700 to 32610 and 32130 to 31940 region.
DECEMBER SILVER
Support should appear near 2089 to 2080 and the 1996 to 1982 region.
Resistance at the 2354 to 2370 and 2411 to 2419.
THE EXCITING ENERGIES
NOV CRUDE OIL
Resistance should appear near 10580 to 10680 and 10960 to 11010.
Support should appear near 10360 to 10320 and 10136 to 10104.
NOV HEATING OIL
Support should appear near should appear near 29370 to 29280 and 28830 to 28740.
Below that buyers should appear near 28290 to 28200 and contain a decline.
Resistance should appear 30360 to 30450, beyond that a test of 30920 to 31020 is likely.
NOV UNLEADED GAS
Support should appear near 26200 to 26120 and the 25190 to 25110 region.
Resistance should appear near 27160 to 27240 and the 27580 to 27750 region. Beyond that sellers should appear near 28200 to 28290 and cap a rally.
NOV NATURAL GAS
Resistance should appear at 3795 to 3806 and the 3858 to 3867 region.
Support should appear near 3682 to 3663 and the 3563 to 3553 region which should hold.
THE GRANDE’ GRAINS
NOV SOYBEANS
Support should appear near 1310 to 1304. Below that 1274 to 1268 should provide support.
Resistance should appear near 1334 to 1346 and 1377 to 1383. Beyond that sellers should appear near the 1415 to 1421 region and should provide resistance. Trade accordingly.
DEC SOYOIL
Resistance should appear near 4370 to 4381, a close over is friendly and augurs for a test of 4425 to 4426. Beyond that Sellers should appear near 4503 to 4514.
Support should appear near 4183 to 4163 and the 4056 to 4046 Region. Below that 3992 to 3982 should contain a decline.
DEC SOYMEAL
Resistance should appear near 430.4 to 431.5 and the 442.5 to 444.6 region. Beyond that sellers should appear near 457.1 to 458.2 and cap a rally.
Support should appear near 405.6 to 404.6 and the 399.2 to 398.2 region, below that buyers should appear near the 386.7 to 385.8 region and contain a decline.
DEC CORN
Support should appear near and 438 ¼ to 437 and the 418 ¼ to 416 ¼ region.
Resistance should appear near 463 ¾ to 465 and the 477 ¾ to 478 ¾ region, which should bring out sellers.
DEC WHEAT
Resistance should appear near 665 ¾ to 667 ¼ and 674 ¾ to 675 ½.
Support should appear near 643 to 641 ¾ and the 635 to 633 ¾ region.
THE LIVELY LIVESTOCK
DEC CATTLE
Support should appear near 12892. Below that buyers should appear near 12740 to 12680 and 12532.
Resistance should appear near 13040 to13100. A close over indicates a test of 13340 to 13460.
FEB CATTLE
Support should appear near 13100 to 13040. Below that buyers should appear near 12890.
Resistance should appear near 13340 to 13460 and 13530.
OCT HOGS
Support should appear near 8967 to 8932. Below that buyers should appear 8872 to 8857 and the 8777 to 8762 region, which should contain a decline.
Resistance should appear near 9137 to 9157. Beyond that a test of 9312 to 9347 is likely and should cap a rally. Above that sellers should appear near 9427 to 9442.
DEC HOGS
Support should appear near 8592 to 8562 and the 8507 to 8492 region. Below that buyers should appear near 8407 to 8392.
Resistance should appear near 8762 to 8777 and the 8857 to 8872 region. Beyond that a test of 8932 to 8967 is likely.
FEB HOGS
Support should appear near 8777 to 8762 and the 8682 to 8662 region. Below that buyers should appear near 8587 to 8557 and contain a decline.
Resistance should appear near 8857 to 8872 region. Beyond that a test of 8932 to 8967 and the 9042 to 9062 region is likely.
APRIL HOGS
Support should appear near the 8682 to 8662 region. Below that buyers should appear near 8587 to 8557 and contain a decline. Traders can buy at 8592 and risk a close under 8537 for three days in a row.
Resistance should appear near 8857 to 8872 region. Beyond that a test of 8932 to 8967 and the 9042 to 9062 region is likely.
THE SATISFYING SOFTS
DEC COFFEE
Support should appear near 11360 to 11300 and the 11010 to 10960 region.
Resistance should appear near 11920 to 12030, a close over is friendly and augurs for a test of the 12680 to 12740 region.
DECEMBER COCOA
Resistance should appear near 2612 to 2620 beyond that a test of 2663 to 2672 is likely. A close over is friendly and augurs for a test of 2716 to 2724.
Support should appear near the 2568 to 2552 and 2519 to 2511. Traders can buy at 2521 and hold for higher prices… Below that buyers should appear near 2469 to 2461. Stay tuned for Flashes
MARCH SUGAR
Resistance is near the 1774 to 1780, a close over is friendly and augurs for a test of 1808 to 1822. Beyond that a trade toward 1858 to 1865 is likely.
Support should appear near 1738 to 1731 and the 1696 to 1689 region. Traders can buy at 1739 and risk a close under 1727 for three days in a row.
DEC COTTON
Support should appear near 8314 to 8300 and 8044 to 8029. Below that 7777 to 7763 should contain a decline.
Resistance is 8668 to 8683 and the 9044 to 9060 region. Beyond that sellers should appear near 9140 to 9156 and cap a rally.
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
Sunday September 22, 2013 9:30 AM South Florida Beach Time
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