FuturesCom Bi-Weekly Investment Outlook # 460 Saturday October 31, 2014. 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
“The best thing about the future is that it comes one day at a time.” – Abraham Lincoln
Traders should stay nimble and stay tuned for flashes in all markets. Geopolitical tensions are elevated but have subsided a bit in front of the normal seasonal holiday period, however volatility is elevated. Investors and traders should continue to hear babble from a variety of government leaders, and finance representatives and because of the upcoming U.S election, U.S politicians will be all over the media. U.S Stock Indices are slightly higher on the year. Interest rates are at or near zero and the U.S Federal Reserve has ended its third round of QE dashing hopes for QE 4 or a halt to the taper which was contemplated after during recent decline in stocks. Long term support for the Dow Jones Industrial Average remains below the recent trading ranges. Global markets remain sloppy. The U.K FTSE 100 and German Dax are lower on the year and the monthly charts are rolling over including the Russell 2000 even with the rally. Brazil is weak but has great demographics. On the other hand, demographics in Germany (Russia and Japan also) are a big problem. Recent census data shows Germany ‘discovered’ it had lost 1.5 million inhabitants. By 2060 or sooner (likely sooner) Germany may lose an additional 20 percent of its population and shrink to about 66 million people. Europe’s economic issues only acerbate the decline. Recent studies in Europe show that historically high unemployment rates among youths, for example in countries like Greece, Italy and Spain are discouraging younger people from having children. Even before the recent data, population in other European nations was expected to shrink by 2060 or earlier, some more than Germany. There are about four workers for every retired pensioner in the European Union. By 2060, the average will drop to two, according to the European Union’s own data. Bottom line is the leaders of those regions
have little time to dither economically and demographically. Getting back to the stock markets, the yearly work remains positive for the Dow and SP500. However support for the major averages is well below the current market levels. Typically the Dow Jones and Nasdaq firm for the holiday trade into Thanksgiving and the rally we have thus far seen is about the average gain into both Thanksgiving and Christmas. The big news was out of Japan where stock markets were pushed higher on the year by additional QE from the Central Bank of Japan and increased allocations by the Japanese pension funds to stocks. Additionally Stock index ETF’s are now part of the mix of assets in the current BOJ QE efforts to boost inflation (as in the past BOJ QE versions in the latter part of the last century). Japanese rates remain at essentially zero. QE for this decade (as in the past decades) now includes everything in Japan not tied down so to speak. In the last issue we mentioned stock market supporting measures coming from that region and Japan has now done that. The Central Bank of Japan also now expects the government to raise taxes on the general population while corporations are expecting a tax cut. At the current pace of QE the balance sheet of the Central Bank of Japan may equal the GDP of Japan in four years. All the while Japan’s population is declining and the burdens are falling upon the general population. In China growth remains sloppy estimates for a 6.5% rate for next year is showing up on many of the economist’s scratch pads… Increased geopolitical tensions in that region remain
unfavorable for companies doing business. Traders should continue to use the volatility to trade the markets. Forex Markets; The euro remains lower on the year. Longer term downside targets are still below the current levels. Cable is lower on the year and acts lousy and range bound and now appears to be leaving the area from above for a downside test of 15760 to 15690. The USD/CAD typically firms over the next few weeks. Over the longer term, USD/CAD targets are higher but is now into resistance and can back and fill. Dollar-Yen is trading higher on the year, 11010 to 10960 is support on the downside and 11300 to 11360 is the likely nearby target on top, above that a test of 11500 and 11600 to 11690 is likely. Do not rule out an eventual test of the 2002 highs in USD/JPY longer term down the road. Dollar Yen typically rises in this period, for now traders should consider Yen a trading affair.
The Aussie and Kiwi longer term downside targets are lower. The Kiwi and Aussie dollar are mixed on the year. Both are trading affairs now, sell rallies. Aussie typically shows some strength in the later part of November however how much is still questionable… Analysis for overseas equity and foreign exchange markets are available upon request. For more detailed information or a country by county economic analysis for trading or hedging programs please call or email a request. Precious Metals and Energy; Gold and Silver remain weak longer term and act lousy once again. Nothing has changed. Gold is a trading affair. Copper remains range bound and sloppy typically copper shows weakness into the end of the year. WTI Crude Oil, Brent Crude and the products are all breaking down, have bounced a bit and are trading affairs. Unleaded Gas has years of price on top of the market and is now weak ditto for Heating Oil. Natural Gas is now is range bound. While economic benefits of lower gas prices are being touted as consumer friendly, even lower prices will be better at this point for the consumer who has suffered from lack of wage growth for more than a decade coupled with a tripling of energy since the turn of the century. Grains have rallied sharply and act better. Livestock markets are a day to day trading affair. Typically Hogs act better this time of year, however they are a trading affair, stay tuned for flashes for all contract months in hogs. Coffee typically firms in November / December but is pricey. If coffee dips traders should look to buy March coffee for a bounce. Sugar remains a trading affair and typically declines late October thru late November. Cotton is continues to bounce around and acts a bit better and is lower on the year. The Cocoa fell as we expected. The long term upside targets in Cocoa have been met. Cocoa is a trading affair now. On to the Nitty Gritty…
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support is near 17,125.00 then 16,960.00 to 16,890.00 and the 16,550.00 to 16,420.00 region where
buyers should appear and contain a decline. Below that 16,150.00 to 16,090.00 should hold.
Resistance is at 17,380.00 then 17,560.00 and the 17.740.00 to 17.800 region.
DOW JONES TRANSPORTS
Support should appear near 8589.00 to 8560.00 then 8499.00 to 8484.00 and the 8314.00 to 8300.00 region.
Resistance is at 8762.00 to 8777.00 then 8856.00 to 8871.00 and 8934.00 to 8964.00
DECEMBER E-MINI SP500
Resistance should appear near 2015.00 and the 2034.00 to 2042.00 region.
Support should appear near 1953.00 to 1946.00, below that buyers should appear near 1929.00 to 1909.00 and the 1865.00 to 1858.00 region. BW Traders can buy at 1867.00 for a bounce and risk a close under 1857.00 for three days in a row.
NASDAQ COMPOSITE
Resistance should appear at 4639.00 to 4650.00 then 4695.00 to 4717.00 and the 4775.00 to 4785.00 region.
Support should appear near 4446.00 to 4425.00 and 4381.00 to 4370.00
DECEMBER E-MINI NASDAQ 100
Support should appear near 4056.00 to 4046.00 then 3992.00 to 3982.00 and the 3929.00 to 3909.00 region. Below that buyers should appear near 3867.00 to 3856.00
Resistance is at 4163.00 to 4183.00 then 4238.00 to 4249.00 and 4328.00 to 4249.00.
DECEMBER E-MINI RUSSELL 2000
Resistance should appear near the 1182.00 and the 1196.00 to 1203.00 region
Support should appear near 1136.00 to 1130.00 then 1101.00 to 1096.00 and 1068.00 to 1058.00
DECEMBER 30 YR BONDS
Resistance should appear near 142-12 and 142-27. Beyond that sellers should appear near 143-22
Support should appear near 139-21 and 138-17 and 137-22
DECEMBER 10 YR NOTE
Resistance should appear near 127-07 then 127-21 and 128-08
Support should appear near 125-22 then 125-07 and 124-22
THE FRENZIED FOREX FRONT
DECEMBER DOLLAR INDEX
Resistance should appear near 8762 to 8777 and 8856 to 8871
Support should appear near 8683 to 8668 and the 8589 to 8560 region.
DECEMBER JAPANESE YEN
Resistance should appear near 8964 then 9040 to 9060 and 9140 to 9156
Support should appear near 8871 to 8856 then 8777 to 8762 and the 8683 to 8668 region.
DECEMBER EURO CURRENCY
Support should appear near the 12380 to 12320 region.
Resistance should appear near 12680 to 12740. Traders can sell at 12677 and hold for lower prices.
Stay tuned for Flashes
DECEMBER SWISS FRANC
Resistance should appear near 10580 to 10630 and 10680.
Support should appear near 10360 to 10320 then 10136 to 10104 and 10021 to 10037
DECEMBER BRITISH POUND
Support should appear near 15760 to 15690 and 15350 to 15290
Resistance should appear near 16090 to 16150. Traders can sell at 16087 and hold for lower prices.
DECEMBER CANADIAN DOLLAR
Resistance should appear near 8905 then 8934 to 8964 and 9044 to 9060.
Traders can sell at 8904 and hold for lower prices.
Support should appear near 8777 to 8762 and the 8683 to 8668 region
DECEMBER AUSSIE DOLLAR
Support should appear near 8683 to 8668, a close under is negative and augurs for a test of 8589 to
8560 and likely the 8314 to 8300 region.
Resistance should appear near 8856 to 8871 and the 8934 to 8964 region.
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1192.00 to 1203.00 and 1232.0 to 1238.0
Support should appear near 1136 to 1130 and the 1101 to 1096 region.
DECEMBER COPPER
Resistance should appear near 30920 to 31020 and 31480 to 31570
Support should appear near 29370 to 29280, below that a test of 28830 to 28740 is likely.
DECEMBER SILVER
Support should appear near 1576 to 1569 then 1535 to 1529 and the 1496 to 1484 region.
Resistance is at 1642 to 1655 and the 1689 to 1696 region. Beyond that sellers should appear near 1731.0 to 1738.0 and 1774.0 to 1780.0
THE EXCITING ENERGIES
DECEMBER CRUDE OIL
Support should appear near 7864 to 7836 and 7601 to 7587
Resistance should appear near 8119 to 8134 and 8194 to 8223.
JANUARY CRUDE OIL
Support should appear near 7954 to 7939 and 7777 to 7763, below that a test of 7689 to 7675 is likely.
Resistance should appear near 8194 to 8223 and 8300 to 8314. Beyond that sellers should appear near 8391 to 8406. Traders can sell at 8297 and hold for lower prices.
JANUARY BRENT CRUDE OIL
Resistance should appear near 8668 to 8683 region. Beyond that sellers should appear near 8934 to 8964 and cap a rally.
Support should appear near 8314 to 8300 and 8044 to 8029.
DECEMBER HEATING OIL
Support should appear near 24690 to 24610 a close under augurs for a trade toward of 23700 to Below that a test of 22750 to 22670 is likely.
Resistance should appear 25190 then 25520 to 25680 and the 26120 to 26200 region.
DECEMBER UNLEADED GAS
Support should appear 20890 to 20800 and 19960 to 19820… Below that a test of 19090 to 19020 is likely.
Resistance should appear near 21780 to 21850 and the 22190 to 22260 region. Beyond that sellers should appear near the 23150 to 23220 region.
JANUARY NATURAL GAS
Resistance should appear 4.046 to 4.056. Beyond that sellers should appear near 4.110 to 4.120 and the 423.8 to 424.9 region.
Support should appear near 3.867 to 3.858 and 3.682 to 3.663.Below that buyers should appear near 3.386 to 3.377 and contain a decline.
THE GRANDE’ GRAINS
JANUARY SOYBEANS
Support should appear near 1036 to 1032 then 973 ¾ to 970 ¾ and 934 ¾ to 931 ¾.
Resistance should appear near 1058 to 1068, where sellers should appear and cap a rally… Beyond that resistance should appear near 1082 and the 1096 to 1101 region.
DECEMBER SOYOIL
Support should appear near 3328 to 3319 and 3270 to 3261. Below that buyers should appear near 3157 to 3148.
Resistance should appear near 3493 to 3503 and the 3553 to 3563 region. Beyond that sellers should appear near 3613 to 3623.
DECEMBER SOYMEAL
Resistance should appear near 399.2 to 398.2 and 404.6 to 405.6. Beyond that sellers should appear near 416.3 to 418.3 and 423.8 to 424.9
Support should appear near 386.7 to 385.8 and 374.3 to 373.4. Below that a test of 356.3 to 355.3 is likely.
DECEMBER CORN
Support should appear near 362 ¼ to 361 ¼ and 356 ¼ to 355 ¼
Resistance should appear near 379 ½ to 380 ¾ and 390 ¾ to 392 3/4
DECEMBER WHEAT
Support should appear near 521 ¼ to 520 and 506 ¾ to 505 ¾. Below that a test of 492 ¾ to 491 ½ is likely.
Resistance should appear near 541 ¾ to 543 and 549 ¼ to 550 ½
THE LIVELY LIVESTOCK
DECEMBER CATTLE
Support should appear near 16150 to 16090 and the 15760 to 15690 region.
Resistance should appear near 16890 to 16960 and the 17310 to 17380 region.
FEBRUARY CATTLE
Support should appear near 16150 to 16090 and 15760 to 15690
Resistance should appear near the 16890 to 16960 region.
DECEMBER HOGS
Support should appear near 8682 to 8667 and the 8592 to 8562 region
Resistance should appear near 8937 to 8967 then 9042 to 9062 and 9137 to 9162.
FEBRUARY HOGS
Support should appear near 8667 to 8682 and the 8317 to 8300.
Resistance should appear near 8932 to 8967 and 9042 to 9062.
APRIL HOGS
Support should appear near 8682 to 8667 and 8317 to 8302.
Resistance should appear near 9042 to 9062 and the 9137 to 9157 region.
THE SATISFYING SOFTS
MARCH COFFEE
Resistance should appear near 19820 to 19960 and 20800 top 20890
Support should appear near 19090 to 19020 and the 18650 to 18580 region. Below that buyers should appear near 18220 to 18080 and contain a decline…
Stay tuned for Flashes
MARCH COCOA
Resistance should appear near 2928 to 2937 and the 3036 to 3045 region… Beyond that sellers should appear near 3148 to 3157 and cap a rally… Traders can sell at 3147 and hold for lower prices. , risk a close over 3162 for three days in a row.
Support should appear near 2829 to 2820 and the 2775 to 2758 region. Below that a test of 2724 to 2716 is likely Trade Accordingly
MARCH SUGAR
Resistance is near 1642 to 1655 then 1689 to 1696 and 1731 to 1738.
Support should appear near 1576 to 1569… Below that a test of 1535 to 1529 is likely.
DECEMBER COTTON
Support should appear near 6190 to 6165.. Below that a test of 6035 to 6023 is likely.
Resistance is at 6577 to 6591 and 6659 to 6673. Beyond that sellers should appear near 6809 to 6836 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
Friday October 31, 2014 2:15 PM South Florida Beach Time
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