Futures Point To A Strong Open
INTEREST RATES
01/02 OVERNIGHT CHANGE to 04:02 AM:BONDS-8 The
Treasury market should no longer be hindered by year-end maneuvering but with
the weak action overnight it is clear that the weakened trend remains in control
of prices despite the roll over of the calendar. It would seem that action in
the stock market is being given more focus than the recent string of economic
numbers, which should have supported the market. However, with the initial
claims decline Wednesday, the US claims reached the lowest level in three years
and that could suggest some improvement in sustained jobless scenario.
STOCK INDICES
01/02 OVRNIGHT CHG to 04:02 AM:S&P +450, DOW27,
NIKKEI NA, FTSE+16 While overnight trading action might be too thin to garner
much of a reading on sentiment, it would seem that the stock market comes into
the New-Year with a positive tilt. While the majority of US economic readings
this week have been disappointing, the fact that initial claims fell to the
lowest levels in three years, certainly hints at an improvement in the overall
jobs picture. Remember just how important the jobs situation is to the market,
as many economists simply can’t bring themselves to be optimistic toward 2004 as
long as there is a lingering jobs threat.
DOW
According to the overnight action in the March Dow, the market is poised to
start the year out with a new high opening. While some might expect the market
to suffer a post holiday let down, it is possible that the month of January
brings in a wave of pension investment and there is no setback. In retrospect,
the Dow has shown very little corrective action since late November and there
would seem to be no reason to doubt the trend. However, given the opening bid
today, close-in support might not be garnered until 10,433. Next upside
targeting in the Dow comes in at 10,610.
S&P
According to the overnight action, the March S&P is coming into the New-Year
with a strong new high bid of 1115.15. Maybe the market will turn its focus to
the January affect, which suggests that the first 15 days of January will divine
the direction for the year. In the past, the January affect has provided long
interest and with the recent pattern of prices, it should be easy to talk up the
January affect. Like the Dow, the sharply higher opening leaves first support
today all the way down at 1111.50.
FOREIGN EXCHANGE
US DOLLAR
The Dollar seems to be prepared to open weaker again
this morning despite what appears to be another round of new highs in the US
stock market. It would seem that the stock market is giving the US economy the
benefit of the doubt on the economic front, while the foreign exchange markets
are not willing to give that kind of a concession. Therefore, the downtrend in
the Dollar continues until there is some type of coordinated intervention. We
suspect that the BOJ was intervening aggressively Wednesday and that certainly
gave the Dollar a temporary short covering burst. However, now that the Dollar
has balanced its technicals that should allow for easier downside follow
through. In short, the economics don’t matter, the strength in US equities don’t
matter, as the market is simply locked into a historical adjustment! Next
downside targeting in the Dollar comes in at 86.30.
EURO
The Euro comes into the session this morning holding
below its recent highs but in a positive bias. About the only concern for the
bulls in the Euro (besides the threat of BOJ intervention against the Dollar) is
the potential that the US employment situation will show a big improvement next
week, which in turn could change the perception on the interest rate
differential front. In other words, the trend is up and until something forces a
change in that condition, be long but aware of what developments might serve up
a change. Near term support in the euro comes in at 125.55.
YEN
It would seem that the BOJ actions or the suspected
action Wednesday, were to no avail, as the Yen looks to come into the session
right back at a critical upside breakout point in the charts. It should not take
long for the BOJ to realize that they will be unable to stop an upside breakout.
SWISS
Near term support in the Swiss comes in at 80.73 and
we would be a buyer of that level looking for new contract highs today or early
next week. If the ECB were to begin threatening intervention, then we would be
less interested in the long side.
BRITISH POUND
One has to be a little concerned with the massive
range Wednesday, as a move outside of that range today could extend
aggressively. We see a critical pivot point at 177.54 but have to leave the edge
with the bull camp. Traders might also go with a breakout of 177.30 and 178.00.
CANADIAN DOLLAR
The rapid climb in the Canadian in the second half
of December is startling and without a direct extension of the upside, we might
be concerned with a major top. In fact, we would suggest that longs consider
swapping long futures for long calls.
METALS
OVERNIGHT
GLD-1.10, SLV-2.80, PLAT-0.70 London A.M.
Gold fix $417.25 +$1.65 LME COPPER STKS 430,525 tons -2,450 tons COMEX Gold
stocks 3.12 ml +70,450 oz Comex Silver stocks 124.2 ml oz +1.65 ml oz
GOLD
Market closed for Holiday. . .
SILVER
Market closed for Holiday. . .
PLATINUM
Market closed for Holiday. . .
COPPER
Market closed for holiday. . .
CRUDE COMPLEX
01/02 OVERNIGHT CHG to 04:02 AM:CRUDE-27,
HEAT-181, UNGAS-146 Market close for holiday. . .
NATURAL GAS
Market closed for Holiday. . .