Thursday, October 17, 2013

Morning Prep 10/17/13;

7:30am EST

Focus-Points this morning:
US Govt Shutdown ends
·       Senate voted overwhelmingly 81-18 in favor of the end of govt shutdown and debt limit extension
·       Analysts expect the Govt Shutdown to cost the US GDP 0.6% this year
·       Traders are waiting this morning to learn when the delayed news data will be released
·       September’s Non-Farm Payroll news is one of the most anticipated news releases to be announced this week
·       In Europe, UK Retail Sales rise to new highs, while Spain’s bond auction was a big success
·       Chinese rating agency Dagong cuts the US sovereign rating to A-, sending the dollar lower against the euro overnight
·       Gold reacts to the US rating cut by pushing back above $1,300 in overnight trading
·       Wednesday’s Fed Beige Book:  The Economy grew at a modest to moderate pace in most districts, with most surveys completed before the shutdown

Economic News on the schedule today:

With the US Govt back open for operations this morning, we will be watching for global reaction to developments in Washington to set the tone for today's session.

We have a lot of news on the calendar this morning, however most of it has been delayed by the US Govt Shutdown.

Traders will be listening closely today and tomorrow to hear when this news will be released.  We can expect today’s price-action to be subdued because of this lack of clarity on the news.

8:00am EST:             Richard Fisher Speaks
8:30am EST:             Housing Starts (delayed by Govt shutdown)
8:30am EST:             Jobless Claims
8:15am EST:             Industrial Production (delayed by Govt shutdown)
10:00am EST:           Philly Fed Survey
10:30am EST:           Nat Gas Inventories (delayed by Govt shutdown)

11:00am EST:           Crude Oil Inventories (delayed by Govt shutdown)

Levels this morning:

Euro Currency Futures:
VAH 3554 / VAL 3494
PHOD 3571 / PLOD 3475
Bullish = Open > 3571
Bearish = Open < 3475

Euro VIP Chart
The euro traded in a very wide range on Wednesday, expanding the range from Tuesday and finishing the session at the highs of the day.  In overnight trading the Dollar-Index was pushed lower after news from China’s rating agency cut the US rating to A-, sending the Euro higher when compared to the USD.  This Euro strength may be short-lived this morning, we will be watching for a price-reversal in the Dollar-Index which would send the Euro back into the trading-range from earlier this week.  As with most markets this morning, after the US shutdown ended we must be patient to wait and see how the global markets are going to react to it.  If the euro collapses in the US trading session we will be selling short back to the range from Wednesday, however if the buyers don’t give up on it we will continue to buy pullbacks with the new bullish trend.  Only time will tell this morning!
Targets above:        3649, 3891
Targets below:        3637, 3625, 3611, 3602, 3592, 3585, 3572

Gold Futures:
VAH 1281.6 / VAL 1273.0
PHOD 1282.9 / PLOD 1268.6
Bullish = Open > 1282.6
Bearish = Open < 1268.6

Gold VIP Chart
Gold Futures traded in a very narrow range on Wednesday, just above the range from Tuesday and closing near the highs of the day.  This price-action suggested that today would be a breakout type of trading session, and it certainly did so overnight.  In overnight trading Gold was affected by the China rating cut, which pushed the Dollar-Index lower, euro and gold much higher.  It’s hard to tell how the market personality will be this morning at the opening-bell at 820am EST.  We may see these prices come all the way back down into the range from Wednesday, or we may see this strength continue.  In either scenario we must stay patient this morning to see how the opening-print looks at 820am EST before we will be able to tell what today’s trading session will bring.

Targets above:        1315.4, 1318.6, 1322.2, 1323.6, 1330.8
Targets below:        1312.0, 1303.3, 1300.4, 1296.0, 1293.4, 1287.1

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Crude Oil Futures:
VAH 102.83 / VAL 101.77
PHOD 102.97 / PLOD 100.75
Bullish = Open > 102.97
Bearish = Open < 100.75

Crude Oil VIP Chart
Crude Oil Futures traded higher on Wednesday breaking above multi-day highs, however closing well off those highs at the end of the session.  With the news from the US govt shutdown, we expected to see Crude Oil prices moving much higher in overnight trading (see Gold and Euro above), but this morning we see prices are right about un-changed since we closed on Wednesday.  If we open the day at 900am EST inside the range from Wednesday we can assume that the market personality is in balance and we will wait patiently to see who takes control after the opening-bell.  Please remember, news will be coming out periodically today and tomorrow that will undoubtedly push these prices around, so we must be patient and wait for our trading opportunities today.
Targets above:        103.20, 103.55, 103.70, 103.90, 104.08
Targets below:        101.11, 101.06, 100.92, 100.75, 100.60, 100.00

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