FuturesCom Bi-Weekly Investment Outlook # 456 Saturday September 06, 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
Friday September 05, 2014
5:00 AM, South Florida Beach Time.
Traders should stay nimble and stay tuned for a plethora of flashes. Geopolitical tensions are a bit elevated. The problems in Ukraine have subsided. The EU and other western powers have given away for sure Crimea and likely parts of eastern Ukraine this year. Russia has achieved some of what they want over the long term. All NATO counties will now assist Ukraine in various manners after this week’s meetings. The Ebola disease in West Africa is out of control and will likely enter North Africa. The Shores of Tripoli are a disaster and Syria is likely to be invaded by outside forces at some point.
Perhaps Russia and Iran will join forces with NATO, considering both nations have some advisors and or troops and equipment on the ground in Iraq already…
Stock Indices are generally up on the year. Interest rates remain at essentially at zero. Long term support for the Dow remains well below the prevailing recent trading ranges. The market acts a bit sloppy.. The Unemployment data released on Friday was a bit soft. The ‘economists’ say it’s an outlier and not to trust the data and it will eventually mean more money from the Fed anyway or at least any chance of a rate hike anytime soon are off the table.. Nothing has changed.
Forex Markets, the Euro remains lower on the year. Longer term downside targets are well below the current levels. ECB president Draghi has embarked on the “whatever it takes road”. Eventually a test of the 2005 lows on the euro is possible. Sell rallies in the Euro. However, Forex Traders can buy EUR/CHF at 12040 and hold for higher prices. This scenario can play out if the President of the U.S takes a back seat on the U.S Dollar. The medium term bull side is a U.S dollar trading range between 8314 to 8300 and 8668 to 8683 on top. It’s election season now in the U.S so all politicians are going to be campaigning and the window is wide open so to speak.
Getting back to the ECB, the plan is: ECB is going to buy assets backed by small business loans and residential mortgages. They may also buy sovereign and other debt issued by government entities. The measures are intended to boost the ECB’s balance sheet to where it was at the beginning of 2012, around €2.7 trillion. The ECB balance sheet is now at €2 trillion and needs to be near 4 to 5 trillion to fix the mess they have in Europe. Thus the ECB may consider buying government bonds. In our view the amount intended to prop up the balance sheet is far less than needed to create a robust economy in the long run. Our broad view of the comments and data coming out of Europe are that the EU is really not working as a monetary union and after 40 years or so as the fractures are beginning to widen again. Cable is now lower on the year. We really see no support until the 16150 to 16090 region. Maybe down to 15760 to 15690… USD/CAD is still broadly range bound. Traders should look for a dip against 10680 to 10580 to buy. The near term upside target for USD/CAD at 10960 to 11010 has been met. Over the longer term , targets remain higher however for now it is trapped in that range. The Dollar-Yen has pushed thru to the upside, 10360 to 10320 is now a support region with an upside objective of 10580 to 10680. Traders and investors continue to look for more stimulus measures from the Government of Japan to help the economy grow. The Japanese stock markets are a tad higher on the year. Rates are essentially zero in Japan, population data is broadly negative.
Due to the population decline Japan remains tenuous long term. China, growth remains meek at best considering the growth over the last twenty years. The Chinese central bank feels widespread stimulus to help the local governments with housing market issues are akin to “drinking poison” according to the central banks own newspaper. Increased tensions in that region have risen for companies doing business in China. On the bright side Chinese investors and economists are expecting more ‘targeted’ stimulative measures from the PBOC. Investors everywhere are looking for more stimulus measures from any government body. The big question globally is why?
Our answer is simply this; it took 20 trillion in U.S debt and a quadrupling of the Fed balance sheet to get the U.S stock market to current levels since the end of the last century, why not more.
We remain negative on the Aussie and Kiwi. Downside targets are lower. Kiwi is beginning to give long term monthly sell signals not seen for a while. EUR/CHF is interesting, looking at a longer term trade Buy EUR/CHF at 12040 or lower, It’s doubtful the Swiss Central bank will allow that to fall much more..
Analysis for overseas equity and foreign exchange markets is now available upon request, for more detailed information, country by county or additional economic analysis please call or email a request.
Precious Metals and Energy; Gold and silver remain range-bound, copper is still range bound between the mid to high 3.20’s and maybe 3.00 perhaps lower into the 2.75 to 2.50 region. Crude is also a trading affair. Supplies are ample, for now nothing has changed from our lengthy comments in the last Bi-Weekly Investment Outlook.
April Cattle is basing and a grind higher into the fall and winter is likely. Grain supplies remain ample. Traders should sell rallies in November Soybeans and January beans. Corn has reached nearby downside targets. Long term targets are at levels not seen for some time, farm incomes are expected to drop 25 % or more and farm land values are likely to decline.
Coffee spreads remain wide for coffee at this level, which is near term negative. Longer term coffee can hold on a sharp break. Sugar is trying to hold its lower long term support and is slightly lower on the year and is likely a buy once again for another attempt at 19.00 to 20.00. Cotton is bouncing around. Cocoa sold off a bit and looks to be digesting its gains and acts sloppy and now the supply demand outlook has tuned and supply may be exceeding demand as data comes out. The long term upside targets in Cocoa have been met.. So Cocoa is a trading affair now.
Onto the nitty-gritty
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 16,960.00 to 16,890.00 an extended close under is negative and augurs for a test of the 16,550.00 to 16,420.00 region. Below that 16,150.00 to 16,090.00 should hold.
Resistance is at 17,310.00 to 17,380.00, beyond that 17,740.00 to 17,780.00 should cap a rally.
DOW JONES TRANSPORTS
Support should appear near 8499 to 8484 and 8406 to 8391.
Resistance is at 8668.00 to 8683.00 and 8762 to 8777
DECEMBER E-MINI SP500
Resistance is at 1996.00 then 2017.50 and the 2034.00 to 2042.00 region.
Support should appear near 1982.00, a close under is negative and augurs for a test of 1967.50 and the 1953.00 to 1945.00 region.
NASDAQ COMPOSITE
Resistance should appear at 4639.00 to 4650.00 and the 4695.00 to 4717.00 region.
Support should appear near 4514.00 to 4503.00 and the 4446.00 to 4425.00 region.
DECEMBER E-MINI NASDAQ 100
Support should appear near 3992.00 to 3982.00 and 3929.00 to 3909.00.
Resistance is at 4110.00 to 4120.00 and 4163.00 to 4183.00
DECEMBER E-MINI RUSSELL 2000
Resistance should appear at near 1180.50 and the 1192.00 to 1203.00 region.
Support should appear near 1136.00 to 1130.00 and 1101.00 to 1096.00
DECEMBER 30 YR BONDS
Resistance should appear near 138-21 and 139-07. Beyond that sellers should appear near 141-22 and 143-16.
Support should appear near 137-21 and 137-06 under that a test of 136-21 is likely and should hold.
DECEMBER 10 YR NOTE
Resistance should appear near 126-17 and 127-07
Support should appear near 124-17 and 123-07.
THE FRENZIED FOREX FRONT
DECEMBER DOLLAR INDEX
Resistance should appear near 8391 to 8406, beyond that a test of 8484 to 8499 is likely.
Support should appear near 8314 to 8300 and 8223 to 8194.
DECEMBER JAPANESE YEN
Resistance should appear near 9629 to 9641 and 9706 to 9737
Support should appear near 9445 to 9429 and the 9347 to 9316 region
DECEMBER EURO CURRENCY
Support should appear near 12740 to 12680
Resistance is at 13040 to 13100. Traders can sell at 13037 and risk a close over 13110 for three days in a row.
DECEMBER SWISS FRANC
Resistance should appear near 10960 to 11010
Support should appear near 10680 to 10580
Trade accordingly
DECEMBER BRITISH POUND
Support should appear near 16150 to 16090
Resistance should appear near 16420 to 16550. Traders can sell at 16417 for a turn lower and risk a
a close over 16567 for three days in a row.
DECEMBER CANADIAN DOLLAR
Resistance should appear near 9237 and the 9316 to 9347 region
Support should appear near 9156 to 9140 and 9060 to 9044
DECEMBER AUSSIE DOLLAR
Support should appear near the 9347 to 9316 a close under is negative and augurs for a test of
9156 to 9140.
Resistance should appear near 9429 to 9445 and the 9526 to 9542 region
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1274 and the 1304.0 to 1310.0 region.
Support should appear near the 1238.0 to 1232.0 region.
DECEMBER COPPER
Resistance should appear near 32610 to 32700 and 33190 to 33280 region.
Support should appear near 31020 to 30920 and the 30450 to 30360 region.
DECEMBER SILVER
Support should appear near 1909.0 to 1902.0 and the 1808.0 to 1822.0 region
Resistance is at the 1982.00 to 1996.00 region.
THE EXCITING ENERGIES
DECEMBER CRUDE OIL
Support should appear near 9156 to 9140 below that a test of 9060 to 9044 is likely.
Under that buyers should appear near 8777 to 8762…
Resistance should appear near 9316 to 9347 and 9429 to 9445. Beyond that sellers should appear near 9526 to 9542 and 9625 to 9649. Traders can sell at 9317 and hold for lower prices.
DECEMBER BRENT CRUDE OIL
Resistance should appear near 10320 to 10360 and 10580 to 10680
Support should appear near 10136 to 10104 and the 9737 to 9706 region.
NOVEMBER HEATING OIL
Support should appear near should appear near 27750 to 27580 and the 27240 to 27160 region.
Resistance should appear 28740 to 28830 and 29280 to 29370
NOVEMBER UNLEADED GAS
Support should appear 25190 to 25110 and the 24690 to 24610 region. Traders can buy at 24730 for a bounce and risk a close under 24590. Below that a test of 24190 to 24110 is likely.
Resistance should appear near 25520 to 25680 and 26120 to 26200. Beyond that sellers should
appear near 27580 to 27750.
NOVEMBER NATURAL GAS
Resistance should appear 3.982 to 3.992 then 4.046 to 4.056 and 4.304 to 4.315
Support should appear near 3.867 to 3.858 and 3.553 to 3.563 where buyers should appear and contain declines. Below that support should appear against 3.386 to 3.377
THE GRANDE’ GRAINS
NOVEMBER SOYBEANS
Support should appear near 1003 ¾ to 1002 ¼ region. Below that a test of 973 ¾ to 970 ¾ is likely
Resistance should appear near 1032 to 1036 and 1047.
Traders can sell January Soybeans at 1031 and hold for lower prices. Risk a close over 1037 for three days in a row.
DECEMBER SOYOIL
Support should appear near 3157 to 3148 and the 3045 to 3036 region. Below that a test of 2990 to 2937 is likely.
Resistance should appear near 3261 to 3270 and 3319 to 3328
DECEMBER SOYMEAL
Resistance should appear near 355.3 to 356.3 and 368.3 to 369.2
Support should appear near 338.6 to 337.7 and 327.0 to 326.1
DECEMBER CORN
Support should appear near the 344 ½ to 342 ¾. Below that a test of 327 to 326 ¼ is likely
Resistance should appear near 366 ¼ to 368 ¼ and 373 ½ to 373 ¾. Traders can sell at 372 ¾ and hold for lower prices. Risk a close over 381 for three days in a row.
DECEMBER WHEAT
Support should appear near 513 ¾ to 506 ¾ and 499 ½ to 497 ¾
Resistance should appear near 549 ¼ to 550 ½ and 564 to 565 3/4
THE LIVELY LIVESTOCK
OCTOBER CATTLE
Support should appear near 15760 to 15690 and 15350 to 15290.
Resistance should appear near 16090 to 16150 and the 16420 to 16550 region
DECEMBER CATTLE
Support should appear near 15760 to 15690 and 15350 to 15290
Resistance should appear near 16090 to 16150 and 16270
OCTOBER HOGS
Support should appear near 10360 to 10320, below that a test of 10137 to 10102 is likely.
Resistance should appear near 10580 to 10680 and the 10960 to 11010 region.
DECEMBER HOGS
Support should appear near 9347 to 9317 and the 9157 to 9137 region
Resistance should appear near 9707 to 9737 and the 9922 to 9937 region. Traders can sell at 9707 and risk a close over 9757 for three days in a row.
FEBRUARY HOGS
Support should appear near 8872 to 8857 and the 8682 to 8667 region.
Resistance should appear near 9137 to 9162, a close over is friendly and augurs for a test of
9317 to 9347 and the 9427 to 9447 region, Where sellers should appear and cap a rally
Traders can sell at 9417 and risk a close over 9557 for three days in a row.
THE SATISFYING SOFTS
DECEMBER COFFEE
Resistance should appear near 20340 to 20420 and the 20800 to 20890 region. Beyond that sellers should appear near 21260 to 21340.
Support should appear near 19530 to 19460, a close under is negative and augurs for a test of 18650 to 18580 and likely the 18220 to 18080 region. Below that buyers should appear near 17800 to 17740 and the 16960 to 16890 region. Traders can buy at 17800 for a bounce and hold for higher prices. Aggressive traders can sell if a close under 19450 occurs.
DECEMBER COCOA
Resistance should appear near 3148 to 3157 and 3261 to 3270.
Traders can sell at 3147 and hold for lower prices.. and stay tuned for flashes.
Support should appear near 2990 to 2972 and the 2937 to 2928 region
OCTOBER SUGAR
Resistance is near the 1569 to 1576 and 1609 to 1615.
Support should appear near 1496 to 1484 and 1496 to 1484.
DECEMBER COTTON
Support should appear near 6350 to 6337 and 6190 to 6165
Resistance is at 6743 to 6755 and 6809 to 6836.
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 September 05, 2014 3:00 PM South Florida Beach Time
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