Futures Point To A Slightly Stronger Open
INTEREST
RATES
OVERNIGHT
CHANGE to  4:17 AM :BONDS -8
The Treasury market continues to waffle in an environment devoid of critical
economic reports. Statements from the Fed yesterday were also mostly offsetting,
with the Richmond Fed suggesting that the US economy is recovering but that the
jobs situation remains the biggest risk to the economy. In other words, even the
Fed balanced the trading action with duel dialogue.
STOCK
INDICES
OVERNIGHT
CHANGE to 4:17 AM:S&P+100 DOW +15Â NIKKEI
+27 FTSE +17Â The stock market seemed to get a bargain hunting technical
bounce Tuesday, with most of the trade thinking that recent price declines were
a little overdone. Therefore, it would not seem like the buying Tuesday was
inspired by the anticipation of better conditions ahead. However, the market
could see some benefit from lower energy prices, as OPEC has apparently decided
to leave production unchanged in their most recent meeting.
FOREIGN
EXCHANGE
EURO:
The EU approved a new ECB President but the new leader isn’t seen as an issue to
the valuation of the Euro. It would also seem like Euro zone trade numbers from
July were unimportant, proving that the real source of direction in the Euro is
the potential weakness in the Dollar and not macro economic readings from the
Euro zone. Near term upside targeting in the Euro comes in at 115.54 but after
that rally we are skeptical that more gains will come without a serious economic
misstep by the US economy. Germany economic readings this morning would seem to
give a slight measure of additional long interest to the Euro.
YEN:
While the BOJ can’t fight the G7, it must step up and give the market something
to think about. Without some intervention threat, the Yen could be without
restraint and that could leave the Japanese economy exposed. Therefore we
suspect that the BOJ will be in soon, possibly Thursday morning and maybe even
today if the Yen manages a rise above 90.10. However, the bias is up and
predicting a top is ill advised. Adding to the Japanese concerns were weaker
than expected METI activity Index figures, which simply ups the ante for the BOJ.
SWISS:
All the talk about investors buying gold instead of the Euro, highlights why the
Swiss has failed to garner an aggressive move higher. In fact, the Swiss looks
very vulnerable on the charts and could fall back to fill a gap down at 73.50 to
73.40.
POUND:
The path of least resistance is up but the Pound is extensively overbought. We
still think that the Pound will make it back to the June high consolidation
zone, before the technical condition limits the action. We suspect that 165 will
soon become support, instead of resistance.
CANADIAN
DOLLAR: As we suspected, the bullish balloon has been burst in the Canadian.
With traders thinking that the Dollar is in a long term down trend it only seems
natural that the Canadian weakens just to protect its export markets. In fact,
we would not be surprised to see the Canadian fall all the way back down to the
bottom of the September consolidation zone of 72.58.
METALS
GOLD:
While Chinese gold failed to sustain gains into its close, it did manage a new
high for the move, before longs decided to take profits into the close.
Therefore, a minor upward bias exists under the surface even if the market is
currently lacking a strong driving force. Apparently many central banks feel
that the Washington accord will be extended next year, while others suggest that
the agreement will be extended but will expand the limit of gold sales from 400
tons annually to 480 tons, which would be a negative for the market.
SILVER:
The silver market is sitting very close to critical support levels on the
charts. In fact, a critical trend line support level comes in today at $513.5.
We get the sense that the silver market is being negatively impacted by the
sloppy action in the equity market and the lack of clear-cut sentiment toward
the economy.
PLATINUM:
The bearish demand talk from the auto sector apparently did not have a sustained
impact on platinum and it would now seem like the metal is preparing to return
to the recent highs. For the platinum to show strength, with the rest of the
industrial and physical demand driven metals trading sloppy, highlights a market
that is trading its own fundamentals. In other words, traders see platinum
supply to be unchanged and apparently think that investment demand is going to
remain strong thereby lifting prices. Â
Apparently
the international copper market was capable of shutting off the negative tilt
from the action Tuesday, as Chinese COPPER: copper prices were slightly higher
and the US early session action is posting a 50-point gain. The Chinese trade
was lifted by broad buying and not necessarily from physical interests. The
trend in the US copper market remains upwardly biased on the charts, with the
key pivot point on the downside seen at 81.75 and resistance seen at 83.40.
CRUDE
COMPLEX
OVERNIGHT
CHG to    4:17 AM Â
:CRUDE -9Â Â ,HEAT+9Â Â
,UNGA+0Â Apparently the talks with OPEC and Venezuela ahead of the
meeting were fractious and failed to result in a solution that Venezuela was
happy with and that could mean difficulty in arriving at a consensus for
production cuts in the December 13th emergency meeting. However, it would seem
that most Arab states in OPEC favor Iraq attending the first meeting since the
war and that the Arab block is getting along.
NATURAL
GAS
Apparently
fund buying lifted natural gas prices but the market might have been given some
indirect support from the early strength in crude oil Tuesday morning.
Apparently some of the suspected record short fund position in natural gas
decided to bank some profits on the early run Tuesday.