Morning Investment and Day Trading Comments Monday November 11, 2013 Equity Futures • Indices • Treasuries • Forex • Precious Metals • Crude Oil • Grains • Livestock • Coffee • Sugar • Cocoa. Free Two Week Trial see https://futurescom.com/free-trial
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty. — Winston Churchill —
Sunday November 10 2013
7:00 AM South Florida Beach Time
The U.S. economy added 204,000 jobs in October well above the average forecast despite the shutdown that was expected to put pressure on hiring. Additionally hiring for September and August were both revised up by a combined 60,000. The unemployment rate ticked up to 7.3% from 7.2% likely from data related to the shutdown. Increased hiring occurred during October at retailers, bars and restaurants, places that tend to boost hiring temporarily for the holiday season. However, almost every industry except the government added workers. The upwardly revised gains in August and September suggest the economy might contain more strength than it appears.
The price on 30-year U.S. government debt fell more than two full points, pushing yields up to 3.855 percent from 3.728 percent on Thursday. Average hourly wages edged up 2 cents to $24.10 while the average workweek was unchanged at 34.4 hours.
Spending by U.S. consumers in September rose 0.2% in September, down from an unrevised 0.3% gain in August. Personal incomes rose a seasonally adjusted 0.5%. Since incomes rose faster than spending, the personal savings rate climbed to 4.9% from 4.7%, marking the highest level since last December. Inflation as gauged by the PCE price index increased 0.1%, with the core rate excluding food and energy rising by the same amount.
Over the past 12 months the PCE index has risen 0.9% overall or by 1.2% on a core basis. Gains in consumer incomes is barely outpacing inflation however recently declining gas prices can act likely a tax break for many consumers. Historically speaking November begins the best six months for the DJIA and S&P 500, and the best eight months for NASDAQ. Buying the Dec SP500 Futures around November 12 and exiting around December 6th usually makes money, while the Dow has already begun a typical seasonality higher that can last from the last week in October until the end of the first week in December. Small caps like the Russell can come into favor during November but can waffle into mid-month and accelerate late in December. While nothing is perfect November is the number-three DJIA and S&P 500 month since 1950. Since 1971, November ranks third for NASDAQ. November is also third best for Russell 1000 and Russell 2000 fourth best since 1979. November has seen declines during bear markets for instance November 2000 the stock market was down 22.9%. In post-election years the DOW has advanced in 12 of the last 15 post-election years since 1953 with an average gain of 1.7%. S&P 500 has been up in 11 of the past 15 post-election years. Small cap perform well with Russell 2000 climbing in 6 of the past 8 post-election years, averaging 2.6%. During post-election years of 1969 and 1973 the market sank. While the NASDAQ and Russell 2000 exhibit the greatest strength at the beginning and end of November the mid-month declines in the Russell 2000 usually occur around the 12th trading day of the month. Recently stock market weakness around Thanksgiving has shifted DJIA and S&P 500 strength to mirror that of NASDAQ and Russell 2000 with the majority of bullish days at the beginning and end of the month. A good way to trade Thanksgiving is to go long into weakness the week before the holiday and exit into strength just before or after as those selling the stock market in November usually end up changing their minds as they begin to prepare to the holiday season directly in front of the market. The Bi-Weekly Outlook advocated buying a mid-month decline in a bull market and that has not changed. Forex once again had wide swings Friday the trading range remains the same in the Euro, Yen and most other Forex markets.
The corn and soybean harvests are essentially done. Soybeans and Corn rose after Friday’s USDA report while the crops are large the demand side appears to be improving. Large buyers from chicken farmers to biofuels refiners should buy more grain at lower prices. The US Department of Agriculture’s domestic crop production and world market estimates were the agency’s first in two months after the government shutdown cancelled the October release. After the report Soybeans closed higher and Soymeal surged. Corn closed marginally higher on likely short covering while Wheat was a tad lower. Typically Corn acts better than wheat until Mid-December also buying March Soymeal in the Middle of November on weakness typically makes money if exiting in the middle of December. While the USDA did raise its domestic corn crop forecast to a new record of nearly 14bn bushels
(as expected) it raised estimates of consumption. Cheaper corn has enabled US ethanol producers to bring or plan to bring idled plants back online for the first time in a while.
The USDA now estimates the 2013 corn marketing year corn price to be somewhere between $4.10-$4.90 per bushel down 30 cents from its September guesstimate. The USDA lowered soybean acres planted and harvested by 0.7 million, increased yield by 1.8 bu. to 43.0 bushels per acre and raised production to 3.258 billion bushels. Their price forecast range is now of $11.15-13.15/bushel is 35 cents lower than before. This month’s U.S.D.A cotton forecasts for 2013/14 showed higher production, off-take and ending stocks compared with the September report. Production is raised nearly 2 percent to 13.1 million bales, due mainly to increases for the Delta and Southeast. Cotton closed a bit lower on the day.
The U.S. GDP grew at an annual rate of 2.8% during the third quarter. Some commodities will now turn attention to demand rather than supplies for a bit. Cocoa Seasonality is for some firm to higher prices after this coming week ends, traders should look to roll longs from December to March.
Coffee is the most oversold on a long term quarterly basis (30 plus years) and is due for a bounce but remains lower on the month and needs to see some higher closes just to bring some balance back in prices. Coffee can rise a bit into the Ide’s of March but is a mess technically while Sugar historically tends to firm a bit after the end of next week and into early January and while down lately is well above the summer lows.
U.S. economic growth is encouraging for meat demand. The USDA forecasts for total red meat and poultry production for both 2013 and 2014 were lowered from September. For 2013, the beef production is nearly unchanged as a lower third-quarter estimate is largely offset by higher expected fourth-quarter production. June Cattle typically shows some price appreciation from now until early January. However Feb Cattle can show weakness in the last part of November until the end of the first week of December, so that is something to begin looking for in a couple weeks. The USDA reduced Pork production from last month based on third-quarter data and a lower-than-expected pace of slaughter in October and early November. Traders should stay tuned for Flashes and Updates in all markets.
The Economic Calendar for the week is shown below also the Morning Comments that were previously sent out on Saturday Morning are included in this edition of Morning Comments.
MONDAY
Veterans Day Holiday all gov’t offices, banks and the bond markets are closed. Equity Markets are open.
TUESDAY
Regional Fed Presidents give views on the economy
WEDNESDAY
07:00 hrs MBA Mortgage Index 11/09 (NA vs -7.0%)
08:30 hrs Export Prices ex-ag Oct (NA vs 0.3%)
08:30 hrs Import Prices ex-oil Oct (NA vs 0.1% )
14:00 hrs Treasury Budget Oct ( NA vs -$120.0B )
THURSDAY
U.S Senate Banking Committee holds hearing on nomination of Janet Yellen for Fed Chairman.
08:30 hrs Initial Claims 11/09 (330K vs 336K)
08:30 hrs Continuing Claims 11/02 (2862K vs 2868K)
08:30 hrs Trade Balance Sept ( -38.8b vs -38.8b)
08:30 hrs Productivity-Prel Q3 (2.0% vs 2.3% )
08:30 hrs Unit Labor Costs Q3 ( 0.8% vs 0.0% )
10:30 hrs Natural Gas Inventories 11/09 ( NA vs 35 bcf )
11:00 hrs Crude Inventories 11/09 ( NA vs 1.577M )
FRIDAY
08:30 hrs Empire Manufacturing Nov ( 4.3 vs 1.5 )
09:15 hrs Industrial Production Oct ( 0.2% vs 0.6% )
09:15 hrs Capacity Utilization Oct ( 78.3% vs 78.3% )
10:00 hrs Wholesale Inventories Sep ( 0.3% vs 0.5% )
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 15,760.00 to 15,690.00 and 15,520.00.
Resistance should appear near 15,925.00 and the 16,090.00 to 16,150.00 region.
DEC E-MINI SP500
Resistance should appear near the 1774.00 to 1780 region. A close over is friendly and augurs for a test of the 1808.00 to 1822.00 region.
Support should appear near 1756.00 then 1747.00 and the 1738.00 to 1731.00 region. Below that buyers should appear near 1696.00 to 1689.00.
NASDAQ COMPOSITE
Resistance should appear near 3929.00 then 3955.00 and the 3982.00 to 3992.00 region.
Support should appear near 3909.00 then 3867.00 to 3858.00 and the 3806.00 to 3796.00 region.
DEC E-MINI NASDAQ 100
Support should appear near 3353.00 then 3328.00 to 3319.00 and the 3270.00 to 3261.00 region.
Resistance should appear near 3377.00 to 3386.00.
DEC E-MINI RUSSELL 2000
Resistance should appear at 1096.00 to 1101.00 then 1108.50 and 1115.50
Support should appear near 1082.00 and the 1068.00 to 1058.00 region.
DEC 30 YR BOND
Resistance should appear near 132-07 and 132-21
Support should appear near 131-07 and 130-21. Below that Buyers should appear near 130-07
DEC 10 YR NOTE
Resistance should appear near 126-21 and 127-07
Support should appear near 125-21 and 125-07
THE FRENZIED FOREX FRONT
DEC DOLLAR INDEX
Resistance should appear near 8134 and 8194 to 8223
Support should appear near 8119 and 8044 to 8029
DEC JAPANESE YEN
Resistance should appear near 10104 to 10136.
Support should appear near 10037 to 10021.
DEC EURO CURRENCY
Support should appear near 13340 and the 13100 to 13040 region.
Resistance should appear near 13640 then 13537 and 13615. BW Traders can sell at 13617 and risk 50 points. Beyond that sellers should appear near 13770 to 13830
DEC SWISS FRANC
Resistance should appear near 10890 and 10960.
Support should appear near 10820 then 10755 and the 10680 to 10580 region.
DEC BRITISH POUND
Support should appear near 15927 and the 15760 to 15690 region.
Resistance should appear near 16012 and the 16090 to 16150 region.
DEC CANADIAN DOLLAR
Resistance should appear near 9526 to 9542 and 9583
Support should appear near 9445 to 9429 is likely
DEC AUSSIE DOLLAR
Support should appear near 9347 to 9316.
Resistance should appear near 9388 and 9429 to 9445.
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1289.0 and 1304.0 to 1310.0
Support is near 1274.0 to 1269.0
DEC COPPER
Resistance should appear near 32610 to 32700 and 33190 to 33280.
Support should appear near 32130 to 31940 and 31570 to 31480
DECEMBER SILVER
Support should appear near 2126.0 and 2089.0 to 20.80
Resistance is at 2134.0 and 2170.0 to 2185.0
THE EXCITING ENERGIES
JANUARY CRUDE OIL
Resistance should appear near 9526 to 9542 and 9625 to 941
Support should appear near 9445 to 9429 and 9347 to 9316
JANUARY HEATING OIL
Support should appear near should appear near the 28290 to 28200 region. BW Traders with Ice Water running thru their veins can buy at 28310 and risk a close under 28190 for three days in a row.
Resistance should appear at 28830 and 29280 to 29370.
JANUARY UNLEADED GAS
Support should appear near 25190 to 25110 and 24690 to 24610
Resistance should appear near 25520 to 25680 and 26120 to 26200
JANUARY NATURAL GAS
Resistance should appear at 3663 to 3682 and 3734 to 3743
Support should appear near the 3563 to 3553 and 3503 to 3493 region.
THE GRANDE’ GRAINS
JAN SOYBEANS
Support should appear near 1289 and the 1274 to 1268 region.
Resistance should appear near 1304 to 1310 and should be tested. Beyond that sellers should appear near 1322 and 1334 to 1346.
DEC SOYOIL
Support should appear near 3992 to 3982 and the 3929 to 3909 region.
Resistance should appear near 4046 to 4056 and 4110 to 4120
DEC SOYMEAL
Resistance should appear near 423.8 to 424.9 beyond that a test of 430.4 to 431.6 is likely.
Support should appear near 418.3 to 416.3 and 412.0 to 411.0.
DEC CORN
Support should appear near and 424 ¾ to 423 ¾ and 418 ¼ to 416 ¼
Resistance should appear near 430 ½ to 431 ¾ and 442 ¼ to 448 ½.
DEC WHEAT
Resistance should appear near 665 ¾ to 667 ¼
Support should appear near 635 to 633 ¾
THE LIVELY LIVESTOCK
DEC CATTLE
Support should appear near 13232 and 13100 to 13040.
Resistance should appear near 13340 to 13460.
FEB CATTLE
Support should appear near 13340 and 13217
Resistance should appear near 13460, a close over is friendly and augurs for a test of 13530.
DEC HOGS
Support should appear near 8772 to 8757 and 8682 to 8662
Resistance should appear near 8857 to 8872 and 8932 to 8967
FEB HOGS
Support should appear near 9157 to 9132 and 9062 to 9037
Resistance should appear near 9237 and 9317 to 9347
APRIL HOGS
Support should appear near 9347 to 9312 then 9237 and 9157 to 9137
Resistance should appear near 9427 to 9447.
JUNE HOGS
Support should appear near 9937 to 9922 and 9837 to 9822.
Resistance should appear near 10022 to 10037
THE SATISFYING SOFTS
MARCH COFFEE
Support should appear near 10680 to 10580 and 10470
Resistance should appear near 10960 to 11010
MARCH COCOA
Resistance should appear near 2758 to 2775
Support should appear near 2620 to 2612
MARCH SUGAR
Resistance is near 1822 and 1858 to 1865.
Support should appear near the 1780 to 1774 region.
MARCH COTTON
Support should appear near 7836 and the 7767 to 7777 region.
Resistance is at 7939 to 7954 and the 8029 to 8044
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 November 10, 2013 12:30 PM South Florida Beach Time
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