Wednesday, September 30, 2009

FuturesPulse Market Recap

***BOND MARKET RECAP - 9/29/2009
December Bonds finished up 0-060 at 121-200, 0-070 off the high and 0-240 up from the low.

December 10 Yr Treasury Notes closed up 0-035 at 118-095. This was 0-160 up from the low and 0-020 off the high.

Technical Outlook
BONDS (DEC) 09/30/2009: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 122-130. The next area of resistance is around 122-010 and 122-130, while 1st support hits today at 121-030 and below there at 120-160.

10 YR TREASURY NOTES (DEC) 09/30/2009: A positive indicator was given with the upside crossover of the 9 and 18 bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 118-235. The next area of resistance is around 118-180 and 118-235, while 1st support hits today at 118-005 and below there at
117-200.

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***STOCK INDICES RECAP - 9/29/2009
December S&P closed down 4.2 at 1054.8. This was 1.4 up from the low and 10.7 off the high. December S&P E-Mini finished down 4.25 at 1054.75, 11 off the high and 1.5 up from the low.

December Dow finished down 53 at 9675, 95 off the high and 5 up from the low.

Technical Outlook
S&P 500 (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal down is a negative indicator for prices. The close over the pivot swing is a somewhat positive setup. The next downside target is now at 1045.13. The next area of resistance is around 1061.04 and 1069.32, while 1st support hits today at 1048.95 and below there at 1045.13.

S&P E-MINI (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The close below the 9-day moving average is a negative short-term indicator for trend. The daily closing price reversal down is a negative indicator for prices. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 1044.25. The next area of resistance is around 1060.25 and 1069.25, while 1st support hits today at 1047.75 and below there at 1044.25.

NASDAQ (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market tilt is slightly negative with the close under the pivot. The next downside target is 1692.00. The next area of resistance is around 1728.00 and 1742.00, while 1st support hits today at 1703.00 and below there at 1692.00.

DOW (DEC) 09/30/2009: Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 9693. The next area of resistance is around 9766 and 9782, while 1st support hits today at 9722 and below there at 9693.


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***CURRENCY MARKET RECAP - 9/29/2009
December US Dollar closed up 0.085 at 77.355. This was 0.330 up from the low and 0.380 off the high.

December Euro closed down 0.17 at 145.73. This was 0.52 up from the low and 0.73 off the high.

December Japanese Yen finished down 0.55 at 110.91, 0.72 off the high and 0.21 up from the low.

December Swiss finished down 0.24 at 96.5, 0.52 off the high and 0.42 up from the low.

December Canadian Dollar finished up 0.19 at 92.19, 0.47 off the high and 0.65 up from the low.

December British Pound closed up 0.83 at 159.51. This was 1.28 up from the low and 0.38 off the high.

Technical Outlook
JAPANESE YEN (DEC) 09/30/2009: A crossover down in the daily stochastics is a bearish signal. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market's close below the pivot swing number is a mildly negative setup. The next downside target is 110.11. The next area of resistance is around 111.37 and 111.96, while 1st support hits today at 110.45 and below there at 110.11.

EURO (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 144.53. The next area of resistance is around 146.34 and 147.02, while 1st support hits today at 145.10 and below there at 144.53.


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***PRECIOUS METALS RECAP - 9/29/2009
December Gold closed up 0.3 at 994.4. This was 8.3 up from the low and 2.8 off the high.

December Silver finished down 0.017 at 16.178, 0.072 off the high and 0.158 up from the low.

Technical Outlook
COMEX SILVER (DEC) 09/30/2009: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is 1586.3. The next area of resistance is around 1633.5 and 1648.2, while 1st support hits today at 1602.5 and below there at 1586.3.

COMEX GOLD (DEC) 09/30/2009: Declining momentum studies in the neutral zone will
tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 981.5. The next area of resistance is around 999.0 and 1003.6, while 1st support hits today at 988.0 and below there at 981.5.


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***ENERGY MARKET RECAP - 9/29/2009
November Crude Oil closed down 0.16 at 66.68. This was 0.86 up from the low and 0.65 off the high.

November Heating Oil closed up 0.39 at 172.36. This was 1.98 up from the low and 1.06 off the high.

November RBOB Gasoline finished down 1.06 at 164.00, 2.12 off the high and 1.46 up from the low.

November Natural Gas finished up 0.03 at 4.86, 0.12 off the high and 0.26 up from the low.


Technical Outlook
CRUDE OIL (NOV) 09/30/2009: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 65.12. The next area of resistance is around 67.43 and 68.13, while 1st support hits today at 65.93 and below there at 65.12.

RBOB GAS (NOV) 09/30/2009: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside objective is 160.59. The next area of resistance is around 165.79 and 167.74, while 1st support hits today at 162.21 and below there at 160.59.

HEATING OIL (NOV) 09/30/2009: A negative indicator was given with the downside crossover of the 9 and 18 bar moving average. Momentum studies are declining, but have fallen to oversold levels. A negative signal for trend short-term was given on a close under the 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The next downside target is 169.09. The next area of resistance is around 173.88 and 175.17, while 1st support hits today at 170.84 and below there at 169.09.

Tuesday, September 29, 2009

Weekly Technical Commentary

USD/JPY

Chart Levels:

Support 88.60..88.00..87.00..86.65.
Resistance 89.75..90.00..91.35..92.55

This week: ↘
This month: ↘

One of the lowest weekly closes this year sent the dollar tumbling against the Yen in Asia this morning. This month we expect a test of the 87.00 area, a level that held miraculously in December and again in January. The bounce from today's low at 88.23 is impressive, but unlikely to stem the flow for more than a week (and maybe not even for the rest of the day). Over the coming month we continue to favour a series of cautious downside tests of key support between 87.00 and 1995's 85.00 (below which it spiked to a low 79.75 over a three month period). A baptism by fire for the incoming regime and an unwelcome headache to add to a long list of woes. Note this is a Yen move as crosses also look set for a drop.

EUR/USD

Chart Levels:

Support 1.4550..1.4500..1.4400..1.4290.
Resistance 1.4700..1.4768..1.4845..1.4900.

This week: →
This month:
↗

Last week's 'doji' suggests some instability at current levels and the need for consolidation. Therefore allow for corrective work under 1.4845, possibly down to the nine-week moving average at 1.4443, this week and maybe the following one also. One-month at-the-money implied volatility is still trying to base against the 10.00% level, and should eventually pick up towards 16.00% over the coming month or two. A weekly close clearly above 1.4700 is needed to increase upside pressure resulting in another round of generalised US dollar weakness. Note that the weekly Ichimoku 'cloud' has a flat top until the end of this year so will not help the Euro higher. However, the nine-week moving average has nudged it up since May.

GBP/USD

Chart Levels:

Support 1.5770..1.5685..1.5500..1.5260.
Resistance 1.6000..1.6235..1.6400..1.6500.

This week: →
This month: ↗

Breaking below the 'neckline' of an irregular 'head-and-shoulders' top, dropping towards the 26-week moving average and 38% Fibonacci support. We shall continue to allow for a sudden sharp drop to the 1.5575 area, and no lower than 1.5275. The drop should end suddenly, probably with a 'spike low'. Note that this corrective move lower should will be difficult to trade and will eventually see a resumption of what we feel is the long term trend to a higher Cable. Because the weekly Ichimoku 'cloud' is so very large we could easily hold inside here until year-end. One-month at-the-money implied volatility rallied from 10.65% and should move on up to 14.50%. Good futures volume Thursday and Friday suggest much speculating.

EUR/GBP

Chart Levels:

Support 0.9190..0.9040..0.8955..0.8880.
Resistance 0.9304..0.9340..0.9430..0.9500.

This week: →
This month: →

Higher again, trading above the top of a good-sized weekly Ichimoku 'cloud' as moving averages cross to bullish. The highest close since March 2009 and above a potential enormous 'flag' – which is usually a continuation pattern. The implications are too awful to contemplate as conservative measured targets from this pattern would be 1.0300 and a squeeze to 1.1000 a possibility. Hard to swallow, yes, but when the central bank governor starts talking down his currency who knows what might happen next. The only ray of hope for those holding pounds is that the weekly Ichimoku 'cloud' drops from mid-November and becomes nothing early February 2010. Cold comfort, indeed.

EUR/JPY

Chart Levels:

Support 129.84..129.00..128.00..127.00.
Resistance 131.85..133.00..134.40..135.50

This week: ↘
This month: ↘

Over the last month all currencies have lost ground against the Yen. After trying the upside three times since April, failing in the 138.00 area, the EUR/JPY chart now has a potential 'triple top' or poor 'head-and-shoulders' pattern. Testing trendline/neckline support this morning, ahead of the pivotal 128.00 area. A weekly close below here targets the bottom of the very large flat-topped Ichimoku 'cloud' and then more. Investors should allow for a move back down to 115.00 and possibly the all-time low at 112.08 January this year. Note that very long term prices are expected to trade broadly sideways for another six months, so that a dip below 112.00 (if at all) should be brief; picking interim highs and lows still a difficult task.

GBP/JPY

Chart Levels:

Support 141.00..139.75..139.00..138.00.
Resistance 143.00..146.60..148.65..151.40

This week: ↘
This month: ↘

Sterling lost 6.7% against the Yen this month weakening across the board. Here, the 'double top' at 162.50 led to a break below the huge weekly Ichimoku 'cloud'. Moving averages have yet to turn bearish but should do so on a close below 140.00. Our measured target remains at 130.00. Below 129.00 on a first attempt is considered highly unlikely, though note that moves below here are likely to be complex and very sharp. We cannot rule out a re-test of the all-time low at 118.80 of January this year because we expect protracted and complex downside testing over many months. One-month at-the-money implied volatility has rallied strongly from a low at 12.85% suggesting short-covering by overly aggressive market makers.

Mizuho Corporate Bank