FuturesCom Bi-Weekly Investment Outlook # 419 April 7 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
“We did not all come over on the same ship, but we are all in the same boat.” Bernard Baruch
Saturday April 06, 2013
9:30 PM South Florida Beach Time
US Stocks closed lower on Friday. Traders should look for more news-driven trading and expanded ranges. The end of the First Quarter window dressing was muted. US Jobs numbers for March were disappointing. Only 88,000 jobs were added last month. However the revisions to previous reports were friendly and the stock market reversed most of the losses during the session. Since all the money in the stock market is made from November to May traders should look for a trading range. Long term investors should be prepared to buy a dip this autumn for higher prices and more acceleration and higher prices into next year. The yearly patterns in SP500 and Dow are just now turning bullish. However that does not mean the stock markets can avoid a sharp downturn after rally into late April. Bonds rose sharply after the report, bonds are making multi decade highs and will take time to roll over, another trading range is likely. Over 150 in 30 Year treasury futures should provide a good selling opportunity.
Friday’s ‘Jobs’ data was overshadowed by the big question, will they or won’t they?
Recent global rhetoric and worries over North Korea may be only a side show but has been years in the making. Long term, companies should stall or begin moving focus away from investments inside China. North Korea would not be ‘doing what it is doing’ without explicit permission from Beijing and the whole thing smells. There are and will be plentiful opportunities in the USA.
Japanese Yen remains long term bearish. Maintain Long Dollar/Yen positions, Buy Dollar / Yen on a dip and short Futures. The Bank of Japan is pursuing a $1.4 trillion + monetary stimulus plan. The plan should lower the value of the yen; typically the Yen can level off in this time frame and firm; however rallies may now be muted since those ‘long yen’ for trading are continually getting hammered. Traders should look for a range bound Euro, 12740 to 12680 remains a support region. Resistance is at the current 13040 to 13100 level a push into 13220 or even 13340 to 13460 is possible and traders should be alert for that. However lower to sideways Euro prices into summer appears likely. Investors should consider this for Europe; the banking system needs more repair and has to recapitalize with another
4 trillion dollars over the next five years. This does not bode well for bank shareholder value or the Euro itself.
Indications are that EU monetary policy is tight and has been tight. Rhetoric and Babble coming from policy makers in the EU may say one thing, however the overriding reason for tight policy, is to deter outflows from Europe while plodding towards an ultimate goal of political union, where countries give up total sovereignty to the EU. The ability to achieve a political union is thought to be easier if the population is driven to beggar status rather than a population that is joyful and rich. So tossing money into Europe is not recommended. There are plenty of opportunities in the US, Europe as a whole can be messy over the next several years as leaders of the EU work to achieve a political union rather than a mere monetary union. The last monetary union did not end well in the late 1800’s and early 1900’s. The pitiful display in Cyprus is an example of the mindset and thought process. Canuck sold off on Friday the rally appears muted and selling is still preferred. Maintain shorts in Swiss futures and buy Dollar / Swiss on dips. Cable can continue to firm a bit. However traders can sell cable on higher prices towards the end of the month for a better move into the lower part of the trading range this summer. Aussie Dollars are at elevated levels, traders should remain short look for lower prices into Summer Stay tuned for Forex Flashes.
Silver and Gold continued to deteriorate over the last two weeks, a bounce in silver is likely before the typical low point in November, nothing has changed, in fact the outlook is worse now.
An excessive rally in precious metals can be sold. Gold appears headed to lower prices and is a trading affair. While global uncertainty can put a floor under gold investors need to consider this; a normal rally in gold after this long drawn out decline is about 25 %, if gold prices fall further into the 1350 region the ensuing rally following the weak period would bring prices back to near the 1700 level, a level not high enough to push through to new highs.. If gold levels off in the 1500 region it can test the highs into 2014. One might say the nearby action has becomes critical. I mentioned in previous issues of Bi-Weekly, the precious metals bull mkt can unwind in a rather clumsy fashion. Copper is a mess, sell a rally for a lower prices into May.
Crude Oil closed lower on Friday, but firmed off the lows. Market participants should consider; after two days of talks in Kazakhstan , Iran and world powers remain “far apart” according to the European Union’s foreign policy representative. With no date set for their resumption it is obvious Iran will have nuclear capability at some time, the question is how soon and will it be this year. More problematic for world powers is the slaughter in Syria. Traders and investors should not be surprised to see US / UN intervention in that conflict over the next 30 to 60 days. These two geopolitical issues could ignite the Sloppy Crude Market which is holding up better than most commodities which are a mess. Traders should look to buy August or July Crude on a dip. Stay tuned for Flashes.
Getting back to the US March US payroll numbers, 88,000 jobs were added last month while 496,000 Americans gave up looking for work (some of this is not a surprise as Baby Boomers continue to leave the workforce). However, people with jobs are what drives domestic demand particularly food items such as pork and beef. Couple this with the Bank of Japan’s monetary stimulus plan that results in a lower yen making foreign products, such as U.S. pork and beef more expensive to import into Japan means that export growth can slow and pressure prices or at least keep a lid on them. In addition, increased exports of genetic pig material from the US to China over the last two years is leading to less exports of finished pork to China thus exports as part of the demand side of Pork can be surprisingly weak. Lower prices in pork over the next year is likely, pork is probably in a normal three year bear in price with last year being the first. Traders should avoid the long side of pork other than for a trade. June hogs can rally into late April and May from an oversold condition. Sell that Rally, look to sell October on a rally for lower prices into Autumn.
Beef prices remain historically elevated and over the next few years should begin to trend lower. Buying Cattle at these levels is akin to buying Corn at eight dollars a bushel. Sell a rally if one occurs. Speaking of Corn, prices collapsed as farmers intend to plant the most corn in since the Great Depression. Wheat prices followed lower, normally Wheat tends to drift lower into the July harvest. The sell recommendation for wheat prior to the report was a tad high and never got hit. Sell a rally. Soybean Bean prices have also been falling and are now near ‘some’ support, however lower prices also likely into mid-month and even early May. A bounce into July is possible after it gets more bloody as planting gets under way and reports are discounted then more weakness into October should produce higher prices into 2014, rather than the halting choppy action now. Weather and planting for grains will become the focus for traders now. ‘You can’t kill them till you plant them’ until then November Beans against 1170 should hold. July Beans against 1274 should hold and we are not near those levels yet. Coffee, Sugar and Cocoa continue to chop and grind. Coffee acts better than it has, however it appears to be in the same range and it would not be a surprise to see 12100 coffee prices with 15200 capping the upside, coffee tend to make a low in July. Cotton has entered a trading range and over the last 40 Years a peak in cotton occurs in late April with a May low followed by a stronger period in June. Sugar tends to makes its lows for the year in April thru June so if it firms traders can wait for a set back and focus on the October contract to buy until then it appears to be a grind lower.
Stay tuned for Flashes and updates for all markets
On to the Nitty Gritty
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 14,530.00 then 14,370.00 and the 14,210.00 to 14150.00 region. Below that 13,830.00 to 13,770.00 should hold.
Resistance remains near 14,590.00. A close over is friendly and augurs for a test of 14,840.00 to 14.960.00, which should cap a rally
JUNE E-MINI SP500
Resistance should appear 1552.00. A close over is friendly and augurs for a test of 1569.00 to 1576.00. Beyond that sellers should appear near 1609.00 to 1615.00.
Support should appear near 1535.00 to 1529.00 and 1512.50. Below that buyers should appear near the 1496.00 to 1484.00 region.
NASDAQ COMPOSITE
Resistance should appear near 3261.00 to 3270.00 and the 3319.00 to 3328.00 region
Support should appear near 3194 and the 3157.00 to 3148.00 region. Below that buyers should appear near 3102.00 to 3092.00 which should contain any decline.
JUNE E-MINI NASDAQ 100
Support should appear near 2758.00 and the 2724.00 to 2716 region. Under that 2672.00 to 2663 should contain a decline.
Resistance should appear near 2775.00. A close over is friendly and augurs for a test of
2797.00, beyond that 2820 to 2829 should bring out sellers while a test of 2874.00 to 2883 can be sold for a turn lower, traders can sell at 2873 and risk 30 points. Stay tuned for flashes.
JUNE E-MINI RUSSELL 2000
Resistance should appear near 923.70 and the 931.60 to 934.70, a close over is friendly and augurs for a test of 952.60 to 954.30. Beyond that a trade towards 970.60 to 973.70 is likely.
Support should appear near 915.60 to 914.00 and the 906.00 to 904.40. Traders can buy at 906.50 and risk a close under 904.90 for three days in a row. Below that buyers should appear near 896.40 to 893.40 and the 887.10 to 885.80 region.
JUNE 30 YR BOND
Resistance should appear near 149-07 and 149-21 then 150-07 and 151-21. Beyond that sellers should appear near 152-07 and 152-21. Aggressive Traders can sell at 152-07 and risk a close over 152-22 for three days in a row.
Support should appear near 147-21 and 147-07. Below that 145-21 and 145-07 should hold.
JUNE 10 YR NOTE
Resistance should appear near 133-21 and 134-07, beyond that 135-07 should cap a rally.
Support should appear near 132-21 and 132-07, failure there is negative and augurs for a test of
131-07 which should hold.
THE FRENZIED FOREX FRONT
JUNE DOLLAR INDEX
Resistance should appear near the 8300 to 8314 region. A close over is friendly and augurs for a test of 8391 to 8406.
Support should appear near 8223 to 8194 and should hold, below that buyers should appear near the 8134 to 8119 region and contain a decline.
JUNE JAPANESE YEN
Resistance should appear near 10320 to 10360. Traders can sell at 10317 and hold for lower prices.
Support should appear near 10136 to 10104 and the 10037 to 10021 region.
JUNE EURO CURRENCY
Support should appear near 12967 and 12890. Below that a test of 12740 to 12680 is likely.
Resistance should appear near 13040 to 13100 and 13155. Beyond that sellers should appear near 13220. Traders can sell at 13217 and risk a close over 13267 for three days in a row.
JUNE SWISS FRANC
Resistance should appear near 10750 and 10817. Beyond that sellers should appear near 10960 to 11010.
Support should appear near 10680 to 10580. A close under is negative and augurs for as test the 10360 to 10320 region.
JUNE BRITISH POUND
Support should appear near 15290 and 15125. A close under is negative and augurs for a test of the 14960 to 14840 region.
Resistance should appear near resistance should appear near the 15525 and the 15690 to 15760 region which should cap a rally for a while. Pick Your Poison…
JUNE CANADIAN DOLLAR
Resistance should appear near 9821 to 9837. Beyond that sellers should appear near 9921 to 9937.
Support should appear near 9737 to 9706 and 9641 to 9425. Below that a test of 9542 to 9526 is likely.
JUNE AUSSIE DOLLAR
Resistance should appear near 10360 the 10417 and 10470
Support should appear near 10320, a close under is negative and augurs for a test of the 10237 and eventually the 10136 to 10104 region.
THE PRECIOUS METALS
JUNE GOLD
Resistance should appear near 1592 and the 1609 to 1615 region. Traders can sell at 1609 and risk a close over 1617 for three days in a row. Beyond that Sellers should appear near the 1642 to 1655 region and cap a rally.
Support is near 1569 region, below that a test of 1552 and the 1535 to 1529 region is likely. Failure there is negative and augurs for a test of the 1496 to 1484 region.
JULY COPPER
Resistance should appear near 33770 to 33860 and the 34250 to 34430 region. Traders can sell at 34240 and hold for lower prices. Beyond that sellers should appear near 34930 to 35030 and the 35530 to 35630 region.
Support should appear near 33280 to 33190 and the 32700 to 32610 region. Below that a test of the
32130 to 31940 region is likely.
JULY SILVER
Resistance should appear near 2820 to 2829 and 2928 to 2937. Beyond that sellers should appear near 3036 to 3045 which should cap a rally. Traders can sell at 2925 and hold for lower prices.
Stay tuned for flashes for a protective to reduce risk.
Support is at 2724 to 2716 region. Below that buyers should appear near 2568 to 2552 and the 2469 to 2421 region.
THE EXCITING ENERGIES
JUNE CRUDE OIL
Support should appear near 9237. Below that buyers should appear near 9156 to 9140 and the 9060 to 9044 region.
Resistance should appear near 9416 to 9347, a close over is friendly and augurs for a test of 9429 to 9445 and the 9526 to 9542 region. beyond that a trade towards 9706 to 9737 is likely.
JUNE HEATING OIL
Support should appear near 28830 to 28740 and the 28290 to 28200 region.
Resistance should appear near 29720 to 299 00 and 30360 to 30450.
JUNE UNLEADED GAS
Support should appear near 28300 to 28200 and 27750 to 27580
Resistance should appear 29280 to 29370 and 30360 to 30450
JUNE NATURAL GAS
Resistance should appear at 4304 to 4315 and 4425 to 4446
Support should appear near 4056 to 4046 and 3929 to 3909.
THE GRANDE’ GRAINS
JULY SOYBEANS
Support should appear near 1310 to 1304 and the 1274 to 1268 region.
Resistance should appear near 1377 to 1383 and 1415 to 1421region. Traders can sell at 1376 and risk a close over 1399 for three days in a row. Stay tuned for flashes.
JULY SOYOIL
Resistance should appear near 4915 to 4926 and 4973 to 4995 which should cap a rally.
Support should appear near 4856 to 4845 and the 4785 to 4775 region. Below that a test of 4717 to 4695 should contain a decline.
JULY SOYMEAL
Resistance should appear near 404.6 to 405.6 and the 416.3 to 418.3 region.
Support should appear near 386.7 to 385.8 and the 368.2 to 366.3 region which should contain a decline. Trade Accordingly
JULY CORN
Support should appear 588 to 585 ½ and the 557 ¾ to 555 ¼ region.
Resistance should appear near 633 ¾ to 635 and the 665 ¾ to 667 ¼ region.
JULY WHEAT
Resistance should appear near 707 ½ to 708 ¾ and the 714 ¾ to 717 region. Beyond that sellers should appear near 732 ¾ to 734 ¼. Traders can sell at 731 and risk a close over 743 for three days in a row.
Support should appear near 700 ¾ to 699 and the 667 ¼ to 665 ¾ region.
THE LIVELY LIVESTOCK
JUNE CATTLE
Support should appear near 12030 to 11920 a close under is negative and augurs for a test of the 11690 to11640 region which should hold.
Resistance should appear near 12320 to 12380, a close over is friendly and augurs for a test of 12527 and the 12680 to 12740 region. Traders can sell at 12677 and risk a close over 12747 for three days in a row.
JUNE HOGS
Support should appear near 8682 to 8668 and the 8317 to 8292.
Resistance should appear near 9037 to 9062 and the 9142 to 9162 region. Beyond that sellers should appear near 9317 to 9347. Traders can sell at 9312 and hold for lower prices.
OCTOBER HOGS
Support should appear near 8047 to 8027 and the 7957 to 7937 region.
Resistance should appear near 8300 to 8317 and the 8557 to 8587 region.
Stay tuned for Livestock flashes
THE SATISFYING SOFTS
JULY COFFEE
Support should appear near 14210 to 14150, a close under is negative and augurs for a test of 13830 to 13770, below that a trade towards 13460 to 13340 is likely.
Resistance should appear near 14530 to 14590 and the 14840 to 14960 region. Beyond that sellers should appear near 15290 to 15350. Traders can sell at 15250 and hold for lower prices. Risk a close over 15800 for three days in a row.
JULY COCOA
Resistance should appear near 2170 to 2185 and the 2267 to 2275 region.
Support should appear near 2089 to 2080 and the 2042 to 2034 region.
JULY SUGAR
Resistance is near 1774 to 1780 and 1808 to 1822. Beyond that sellers should appear near 1902 to 1909.
Support should appear near 1738 to 1731 and the 1696 to 1689 region.
JULY COTTON
Support should appear near 8589 to 8560 and the 8499 to 8484 region. Below that buyers should appear near 8406 to 8391.
Resistance is near 8934 to 8964 and the 9044 to 9060 region. Beyond that sellers should appear near
9316 to 9347.
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 April 07, 2013
1:00 PM South Florida Beach Time
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FuturesCom Bi-Weekly Investment Outlook # 419 Sunday April 07, 2013 Equity Indices – Treasuries – Currency Trading – Forex – Precious Metals – Energy – Grains – Livestock – Softs Comments
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