Futures Point To A Weaker Open
INTEREST RATES
OVERNIGHT CHANGE to
04:28 AM
The Treasury market comes into the action today close to the bottom of the
recent consolidation zone and that is certainly to be expected when one
considers the very impressive
numbers released Wednesday. However, the initial price reaction off the
numbers was really surprising, as prices actually firmed before settling back
later in the session. Treasuries might have found support Wednesday from an
ultra weak Dollar and rumors of a terrorism incident in the
subway.
STOCK INDICES
OVRNIGHT CHG to
04:28 AM
DOW-14, NIKKEI-62, FTSE+4Â
One is
left with only feeble excuses when explaining why stock prices performed so
poorly Wednesday, in the face of extremely supportive economic information.
Even after the largest quarterly jump in corporate profits in 19 years, much
better than expected ongoing claims readings and soaring durable goods
readings, the stock market simply faltered. Apparently, the market is
concerned at weakness in the dollar, high energy prices, threats of a trade
war with
and periodic terrorism concerns. On Wednesday, rumors that some
subway workers were sickened by a mysterious gas seemed to prompt terrorism
concerns and that in turn seemed to deflate stock prices following the
exceptionally strong flow of macro economic information.
DOW:
While the Dow seems to be without aggressive upside momentum and is flirting
with a near term chart failure of 9,735, there would seem to be plenty of
support just under the market and lingering hopes that the post holiday buzz
will serve to boost prices. In fact, many in the trade think that high-end
retailers are going to post strong sales today and that the news of those
sales will be known before the close today. It does seem like investors are
bullish but are quick to take profits! In order to spark an aggressive rise in
prices, we feel that the December Dow needs to rise above 9,794 in the first
hour of trade. An upside breakout above a downtrend line from the November
high comes in today at 9,800, which is obviously an even number! Many times
the Dow has trouble getting above and staying above even number bench marks.
S&P
500: Critical pivot point resistance comes in today at 1061.30, but we would
not be surprised to see the S&P manage a retest of the old contract high.
However, we fear that traders will be inclined to take profits on a run to the
old high. In fact, in order to charge into new high ground today Wall Street
would need to get a swift kick from retail stocks. If the December S&P were to
fall back below 1053.10 today, that would really be a major disappointment.
FOREIGN
EXCHANGE
Dollar:
The Dollar starts the session today into new low ground for the move and won’t
even have the benefit of supportive economic numbers. After the action
Wednesday, it wouldn’t even seem like the Dollar cares about the condition of
the
economy. It is clear that many consumers and investors are unwilling to give
the
economy credit and that in turn seems to be part of the
bEAR case in the Dollar. Since the US Dollar found no support off the
news Wednesday, we are doubtful that even a strong kick-off to the
holiday shopping season will provide any support to the Dollar. On the other
hand, if the trade detects the slightest disappointment from the kick off
today, that would probably accelerate the downside in the Dollar. The next
support in the Dollar comes off the monthly chart down at 92.00 and then not
until 88.92. With
apparently retaliating against the
for prior protectionist actions, the Dollar certainly has the fundamentals to
continue sharply lower. In fact, unless the
stock market soars off the best holiday sales in 5 years, the Dollar would
look to fall consistently in the days ahead.
EURO:
By most measures, the Euro made a new all time high overnight. However, using
a monthly nearby Euro chart, one might peg the all time high at 123.04. With
the Euro zone seeing some surprisingly good readings in the French
unemployment report, the Euro certainly has a fundamental basis to climb. Most
other readings from the Euro zone today were either “as expected†or “slightly
better than expected†and that fosters fresh buying. The most important Euro
zone reading overnight was the first “positive†Business Confidence readings,
since mid 2001. Unless the US Dollar manages a surprising reversal, we see
little to stop the Euro from persistent gains.
YEN:
While Japanese stock prices were down overnight, economic numbers from
over the past 36 hours have been strong. With Japanese housing starts strong,
Japanese Industrial production rising by +0.8% and the Dollar streaking into
new low ground, we would have expected the Yen to be a little stronger, but
instead it looks pretty negative on the charts. In fact, given the combination
of factors this morning, the bulls should be extremely discouraged in the Yen.
Critical support is now pegged at 90.91.
SWISS:
The Swiss certainly isn’t confused with the current setup, as it rose
overnight to a new high for the move and looks primed to rise to the May highs
around 78.00.
POUND:
With home prices continuing to soar in the
it is possible that the trade expects higher interest rates from investments
held in that country. The next upside target in the Pound comes in on the
monthly charts up at the 1998 high of 173.00
CANADIAN DOLLAR: Like the Swiss, the Canadian has no confusion toward the
current fundamental and technical setup. In fact, one needs to flip to the
monthly charts in the Canadian to find the next resistance target of 77.80,
which is within the 1992-1993 consolidation zone.
METALS
OVERNIGHT CHANGE to 04:28
AM:GLD+5.70, SLV+5.70, PLAT+10.20Â London A.M. Gold fix $392.00 +$.50 LME
COPPER STKS 466,900 tons -1,425 tons COMEX Gold stocks 3.06 ml -196 oz
Comex Silver
stocks 124.5 ml oz Unchanged OVERNIGHT: Minor upward gains were forged on thin
vol and tight trading ranges.
GOLD:
MARKETS CLOSED FOR
Â
SILVER:
MARKETS CLOSED FOR
PLATINUM: Â MARKETS CLOSED FOR
COPPER:
MARKET CLOSED FOR
CRUDE COMPLEX
OVERNIGHT CHG to 04:28 AM:CRUDE+64, HEAT+166, UNGAS+167Â
MARKETS CLOSED FOR HOLIDAY
API/DOE Crude Oil Stks Est
+1 to +3 ml bls Actual change released at 9:30
cst API/DOE Distillate Stks
Est -1 ml to +2 bls
Actual change released at 9:30 cst API/DOE
Gasoline Stks Est +1
ml to +1.5 ml bls Act change released at 9:30
cst API/DOE Refinery Operating Rate
Est +0.2 to +.3% API Prev
94.0% DOE Prev 93.7%. .
NATURAL GAS
MARKET CLOSED FOR
.