CTS Market Summary

[CTS]

Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 11/30/09

SUMMARY OF UPCOMING DATA 12/01/09

10:00 AM ISM MFG INDX (55.0)
10:00 AM US CONSTR SPEND (-0.4%)
10:00 AM PENDING HOME SALES INDEX


DATA RESULTS 11/30/09
CHICAGO PMI (56.1 VS. 53.0)[/LEFT][/CENTER]



US DEBT REVIEW AND OUTLOOK

US TREASURIES posted a quiet session as concerns eased regarding the possible default of debt from Dubai World. The short end of the curve recorded the highest gains of the session, with 2 and 5 year notes offering a more attractive security haven as the markets yield appetite returned. U.S. 10 and 30 year futures failed to find any clear direction, as equities closed near their highs of the session supported by the release of a definitive price tag of Dubai debt that will be refinanced (remember, equity markets can go up on good or bad news- uncertainty is usually a catalyst for fixed income buying).

Traders were also reluctant to take on any large position in longer yielding debt ahead of the final readings of employment for 2009. Speculation suggests that the readings could suggest a significant slowdown of job losses, which of course will be open to significant review and criticism. Overall markets appear cautiously supportive of higher prices in the short term, particularly as new levels of uncertainty and an apparent push to drive down mortgage rates (an early Christmas present?) may support prices through January, 2010

Technically, December 30 year futures remain on the brink of overbought territory. Expecting some volatility as markets square up positions for roll to March contract. Expecting this contract to pullback to 122-06. Significant resistance at 124-17.

US EQUITY REVIEW AND OUTLOOK


US EQUITIES posted solid gains for November. The major indices closed near their highs of the session, after some of the specter of uncertainty regarding Dubai’s financial situation was lifted late in the trading session. Financial stocks led the recovery, as a report from Dubai World announced that the main focus of debt restructuring talks is revolving around $26 billion worth of debt. This figure was significantly smaller than the early speculation that resulted in significant losses in the global equity markets during the US Thanksgiving holidays. A retreat in the US dollar, as concerns regarding risk exposure subsided, also supported the late rebound in equity prices.

The retail sector struggled as the opening salvo of Holiday shopping offered a mixed picture to investors. Overall shopping traffic was higher, but actual spending was down from the same time period last year. The question remains if retailer’s strategies of inventory management will find a balance with the bargain conscious attitudes of holiday shoppers.

Technically, December S&P futures just above near term support at 1093.00. Chart set up suggest that the market may have some more downside to test. S&P futures seem likely to test 1080.50 as near term support. A break of this level sets up for downside movement to 1065.00 and 1059.00. Resistance for the contract sets up at 1103.00.












Prepared by Rich Roscelli & Paul Brittain.




Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

 

[CTS]

CTS Market Summary 12/01/2009

Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 12/01/09

SUMMARY OF UPCOMING DATA 12/02/09
8:15 AM ADP EMPLOYMENT REPORT
10:30 AM EIA INVENTORY REPORT
2:00 PM BEIGE BOOK


DATA RESULTS 12/01/09
ISM MFG INDX (53.6 vs.55.0)
US CONSTR SPEND (0.0 -0.4%)
PENDING HOME SALES INDEX (114.0 vs. 109.5)



US DEBT REVIEW AND OUTLOOK

US TREASURIES retreated on Tuesday, as the long end of the yield curve came under the bulk of selling pressure. Risk tolerance returned to the global markets with an apparent cheer today as the uncertainty of Dubai World securities default continues to wane. Worries regarding the regions debt subsided after a report by the Wall Street Journal stated that Dubai World was close to reaching terms of renegotiation of approximately $26 billion of its debt tied primarily to its regional commercial real estate holdings.

The lack of a “fire sale” mentality (so far) with regards to Dubai’s financial difficulties prompted traders to rebound from risk hesitancy. This fueled a rotation to higher yielding investments which put renewed pressure on the US dollar, which fell to its 2009 low. Additional steepening of the yield curve was supported by the Australian Central Bank raising interest rates for a third consecutive month and a report that the euro zone unemployment rate remained high (9.5%), but steady. Both of these developments seemed to support sentiment of global recovery, lessening the appeal of low yielding government debt.

Holders of long positions also looked to profit take ahead of this week’s US employment data. Expectations are for the lowest amount of jobs lost for 2009 to be reported (-120,000). Assuming the traditional theory that employment recovery is the lagging indicator of a recession/recovery cycle- expectation of a slowdown in job losses would be just the incentive that holders of Treasuries would need to pullback on long positions. While sentiment remains negative for Treasuries due to the historic supply and hampering of returns due to the weak dollar, the employment picture could create a “sell the rumor, buy the fact” rebound in Treasuries as they continue to range trade going into the end of 2009.

March 30 Year futures are the lead month. Technically, the contract appears to be setting up for a continuation to the downside. Ranges should remain tight for the week, with a likely retracement back to 121-28, with 122-08 setting up as resistance. This should be followed up by continued downside movement to initial support level of 121-05. Key support level sets up at 120-24, with a break of this creating a path to test 120-00.

US EQUITY REVIEW AND OUTLOOK


US EQUITIES continued the pre Christmas rally on Tuesday, as higher risk/reward instruments continue to shrug off the apparent speed bump of the Dubai World default. Markets continue to breathe short term sighs of relief as the amount of debt being renegotiated was less than speculated ($26 billion). In addition, reports surfaced that the negotiations were proceeding well and rescheduling of the debt payment plan should be forthcoming.

Overall market sentiment was strong today, with the major indices closing near their highs of the session. Technology, material, and media stocks were among some of the strongest gainers. Equity bellwether General Electric was at the center of a major deal today. The company announced an agreement to buy the needed stake of NBC Universal from Vivendi to facilitate the sale of 51% of the media group to Comcast. This deal was viewed as a positive step toward GE achieving the desired goal of consolidating its business dealings.

Overall upbeat forecasts in beleaguered sectors such as homebuilding and retail helped drive the US dollar near its lowest levels of 2009, fueling additional appetite for risk.

One element of today’s equity jump appears to be playing devil’s advocate. The financial sector lagged behind most gainers today. This element could suggest that the elements of recovery remain fragile in the outlook for traders and investors. The question (or lessening) of market volatility is not likely to be answered anytime before the middle of 2010, so traders should expect significant volatility and its contribution to choppy equity markets, with price floors dropping out quickly for the remainder of the year. Traders should seek to employ the corresponding tools and strategies to protect and/or take advantage of underlying caution and uncertainty.

Technically, Dec S&P futures appear to be forming a triple top. Initial Resistance should form at 1113.50, with a break of this level possibly setting up a test of 1121.50. Downside support for the market sets up at 1093.00 with 1083.00 and 1066.00 likely downside targets if this level is pierced.

Regarding the determination of an end of year target- Not high on priority list, futures allow by trading benefits from upside & downside movement after all. Will try to come with something in the next day or two.


US DEBT FUTURES OPEN HIGH LOW CLOSE CHANGE
US H0 (US 30 YRS) 122-21 122-21 121-15 121-20 -1 03/32nds
SP Z9 (S&P 500) 1104.00 1111.70 1102.70 1108.40 +13.60










Prepared by Rich Roscelli & Paul Brittain.



Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

 

[CTS]

CTS Market Summary 12/03/2009

Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 12/03/09

SUMMARY OF UPCOMING DATA 12/04/09
8:30 AM US NONFARM PAYROLL (-100K), UNEMPLOYMENT (10.2%)
10:00 US FACTORY ORDERS (0.2%)


DATA RESULTS 12/02/09
US WEEK JOB CLAIMS (457 K/485 K), PRODUCTIVITY (8.1%-8.6%), UNIT LABOR COSTS (-2.5/-4.2%)
ISM NON MFG INDX (48.7/52.0)
AM EIA NAT GAS REPORT (2 BCF)
US 3 ($40B), 10($21B), 30($13B) YEAR TREASURY ANNOUNCEMENTS



US DEBT REVIEW AND OUTLOOK

US TREASURIES retreat, with March 30 year futures dropping over a full basis point at their worst levels of the session. The downside movement on treasuries today appeared driven to profit taking from last week’s gains, as trading volume slowed dramatically at an earlier point than usual-even before the monthly payrolls are released. . Optimism regarding the employment picture received a second boost as weekly jobless claims came in lower by over 30,000. The positive outlook for this reading is relative though, as the shortened Thanksgiving week was expected to contribute to a lower reading.

Supply concerns also returned to the market, as the Treasury posted its announcement of $74 billion of 3, 10, and 30 year debt coming to market next week. The final reading of employment for the week is scheduled for Friday, with nonfarm payrolls expected to decline by a 2009 low of 100,000. The release may be the completion of the “sell the rumor, buy the fact” scenario which seemed to drive trader sentiment this week, which could result in some early volatility and some rebound in prices on Friday.

From a technical perspective, March 30 year futures are close to testing support at 119-28. Volatility on Friday could drive prices to spike down to 119-16. However a likely scenario will be a retracement back to the 120-27 level. If this level holds, market should trade in a range with a downward bias that should find downside target of 119-10. Break of resistance could set up for test of 121-14.
US EQUITY REVIEW AND OUTLOOK


US EQUITIES traded in narrow range, with mixed to slightly negative sentiment throughout most of the session. Focus of data was somewhat limited as most traders remained sidelined ahead of Friday’s release of US nonfarm payrolls and unemployment figures for November. Expectations are for a continued slowing of job losses, with the unemployment rate remaining relatively steady.
Overnight sentiment in equities began on a positive note after Bank of America announced it would be repaying $45 billion of TARP funds. This combined with supportive rhetoric from the ECB pushed equities to new highs overnight. The ECB kept interest rates unchanged and eluded to possible exit strategies for its emergency monetary policies.

Gains fell back after a weaker than expected reading on the US service sector. The ISM non manufacturing index posted an unexpected reading below 50-the balance figure between expansion and contraction. Financials remain under pressure due to uncertainty regarding future revenue streams and the outlook for global recovery. Technology stocks were once again the best performing sector, prompted by the General Electric sale of NBC.

Stocks closed near their worst levels of the session. Technically S&P futures have hit a double top in the 1113.00 range. Market appears ready to test downside of range at 1093.00, with 1084.50 setting up as a support. A break of this level could lead market further down the Fibonacci path to 1073.00. Resistance remains near 1113.00, as there has been no significant hold above this level. Should this level give way, upside targets for the contract set up at 1118.50 and 1122.50.



US DEBT FUTURES OPEN HIGH LOW CLOSE CHANGE
US H0 (US 30 YRS) 121-11 121-12 119-26 120-07 -1.01/32nds
SP Z9 (S&P 500) 1110.50 1116.80 1097.50 1098.00 -9.90










Prepared by Rich Roscelli & Paul Brittain.




Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

 

[CTS]

CTS Market Summary 12/07/2009

Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 12/07/09

SUMMARY OF UPCOMING DATA 12/08/09
1:00 PM US 3 YEAR NOTE AUCTION


DATA RESULTS 12/07/09
NO MAJOR ECONOMIC RELEASES



US DEBT REVIEW AND OUTLOOK

US TREASURIES regain some ground from last week’s plummet, as dovish comments from Fed Chairman Bernanke prompted some short covering ahead of the first of three Treasury auctions this week.

A lack of fresh data to begin the trading week turned additional focus to comments from Federal Reserve Chairman Bernanke. Speaking at the Economic Club in Washington D.C, the chairman stated that the economy continues to face “formidable headwinds” in the form of sustained job losses and continued tightness of credit to borrowers at the consumer level. Based on this outlook, the chairman proposed that the pressure of higher interest rates and inflation going into 2010 would be moderate at best. Additional monetary support for US debt recovery stemmed from Chinese comments that the country would continue to support a strong pro growth policy.
Proportionally, the short end of the yield curve gained the most as traders expected a reasonable “out of the box” reception for the US 3 year note auction ($40 Billion)

Technically, March 30 year futures rebounded off support level hit in early November. Monday’s rate of correction appears in line with expectation. Resistance based on short term rebound looks to find strong resistance at 119-24. Downside sentiment remains in place, with next downside target setting up at 118-04
US EQUITY REVIEW AND OUTLOOK


US EQUITIES traded mixed to slightly lower on Monday, as a lack of follow through from Friday’s optimistic payroll number kept a subdued sentiment on equity trading. Initial support for stocks came from news that China would maintain a “pro-active” fiscal policy throughout 2010, while keeping its monetary policy accommodative. The outlook also put some pressure on the US dollar, giving back some of its gains from late last week. The Dollar then reverses back toward positive territory after traders digested Fed Chairman Bernanke’s comments on likely ongoing and future headwinds for the economy going into 2010.

Telecom stocks were the best performing sector, led by strong outlook for Sprint Nextel and RIM. Early gains in credit card issuers eroded, after Bank of America posted a buy recommendation on the sector, citing improvement for earnings as the economy improves and fees/interest rate increases contribute to revenue growth. Obviously, the Fed Chairman’s comments failed to inspire those stocks any further.

Technically, little has changed for December S&P futures have hit a double top in the 1113.00 range. Market appears ready to test downside of range at 1093.00, with 1084.50 setting up as a support. A break of this level could lead market further down the Fibonacci path to 1073.00. Resistance remains near 1113.00, as there has been no significant hold above this level. Should this level give way, upside targets for the contract set up at 1118.50 and 1122.50. A pattern of slightly higher highs could spur technicians to consider a strong push to try and hit high target for year of 1125.00.



US DEBT FUTURES OPEN HIGH LOW CLOSE CHANGE
US H0 (US 30 YRS) 118-26 119-19 118-18 119-04 +10/32nds
SP Z9 (S&P 500) 1104.30 1110.20 1100.00 1103.70 -4.40










Prepared by Rich Roscelli & Paul Brittain.




Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

 

[CTS]

CTS Market Summary 12/08/2009

Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL FUTURES MARKET SUMMARY 12/08/09

SUMMARY OF UPCOMING DATA 12/09/09
10:00 AM US WHOLESALE TRADE
10:30 AM EIA PETROLEUM REPORT
1:00 PM US 10 YEAR NOTE AUCTION ($21 B)


DATA RESULTS 12/08/09
US 3 YEAR NOTE AUCTION: BID TO COVER 2.98-YIELD 1.223


US DEBT REVIEW AND OUTLOOK

US TREASURIES continue to build on Monday’s recovery in prices as market players quelled concerns regarding global financing concerns by executing a “flight to safety” strategy-purchasing Treasuries primarily on the short end of the yield curve. A official (not surprising) downgrade of Greece’s debt by rating agencies Fitch and Moody’s to triple B plus- the final rating of investment grade debt with a negative outlook fueled concerns of renewed crisis of confidence in global fiscal and monetary policies.

Risk appetites were quelled further by weaker than expected readings on German and UK industrial production figures. In the US, weaker than expected sales figures from McDonalds brought to light the ongoing jobs crisis (fewer people grabbing quick breakfasts on their way to work) rather than a sudden rise in Americans looking to eat healthy. All of these elements combined to raise uncertainty in global markets, sending traders and investors searching for relatively stable returns in lower yielding currencies. The global concerns helped to send the US Dollar Index to its highest level in nearly a month, supporting the appeal of US Dollar denominated debt in terms of overall return.

Tuesday’s auction of US 3 year notes ($40 B) actually dampened buying demand. The auction resulted in a relatively strong bid to cover of 2.98. Higher demand came at the cost of higher yield. The accepted yield was a higher than expected 1.223. Treasury bidders were more enthusiastic at the weeks US 4 week bill auction, which resulted in a zero percent interest rate (the same as last year) as holders forsook yield for security as the uncertainty of the year end outlook looms. Wednesday will give host to the US 10 year note auction ($21 B) Traders will likely take note of demand further out on the yield curve.

Technically, March 30 year futures closed slightly below resistance at 119-24. Range trading should allow market to drift back to 119-12 as initial support. Downside target 118-21. Resistance sets up at 120-08, with 120-22 breakout target to upside.

US EQUITY REVIEW AND OUTLOOK


US EQUITIES fell on economic concerns stemming from the downgrade of Greece’s Treasury debt to just above junk status by ratings agencies Fitch and Moody’s. Disappointing sales from McDonalds further fueled investor concerns regarding the “economic headwinds” which appear to be reemerging just in time for the New Year. Further developments regarding the debt crisis in Dubai, as investors begin to sense further shoes to drop and sold equities in favor of flight to quality instruments such as US Treasuries and Euro Bunds. Additional recovery disappointments occurred on weaker than expected readings on German and UK industrial production.

Stress relief or drowning sorrows (depending on your positions) allowed Brown and Forman, maker of Jack Daniels, to post better than expected quarterly profit. Financials and energy stocks were among the biggest losers in Tuesday’s session.

Technically, December S&P futures broke their first level of support at 1093.00. Market is setting up to test 1086.00 as significant support level. If that level holds, suggest buying at 1088.00, as market could retrace back on short covering to 1094.00. Resistance sets up at 1102.75.

US DEBT FUTURES OPEN HIGH LOW CLOSE CHANGE
US H0 (US 30 YRS) 119-08 120-08 119-04 119-21 +17/32nds
SP Z9 (S&P 500) 1095.50 1097.30 1087.80 1090.00 -13.70










Prepared by Rich Roscelli & Paul Brittain.



Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.