Friday, October 11, 2013

Morning Prep 10/11/13;

7:30am EST

Focus-Points this morning:
·       US Govt Shutdown begins its 11th day
·       White House:  Obama has a good meeting with Republicans regarding a deal to extend the debt limit anywhere from 6-weeks to 1-year
·       Italy’s bond auction is considered a big success, confidence in the EU continues
·       US Banks begin their earning season today (JPMorgan, Wells Fargo)
·       Equities trading mixed this morning after big gains on Thursday, markets waiting for news on the US debt-deal
·       (IEA) International Energy Association sees 2014 Oil demand to rise; the US will become the largest non-OPEC oil producer by Q2 moving ahead of Russia
·       E-Mini S&P: +.10%
·       Crude Oil: -1.20%
·       Gold:  -.85%
·       Euro: +.35%

Economic News on the schedule today:
Overall, the markets are focused on the development out of Washington regarding the debt ceiling deal.  At this time both sides were still negotiating there are hopes that a deal would be agreed ahead of next week’s debt ceiling deadline.  The USD is slightly lower this morning as traders enter Friday with an announcement of a deal on their minds.

This morning we had 2 Red-Star news events on the schedule, however they have been delayed due to the US Govt Shutdown.

We will hear from consumer in the US this morning at 9:55am EST which will tell us if the average consumer is begin affected by the ‘shutdown’.

8:30am EST:             Producer Price Index [PPI] (delayed due to shutdown)
8:30am EST:             Retail Sales (delayed due to shutdown)
9:55am EST:             Consumer Sentiment
10:00am EST:           Business Inventories (delayed due to shutdown)
11:15am EST:           Obama & Republicans meeting to discuss Debt-Deal

Levels this morning:

Euro Currency Futures:
VAH 1.3542 / VAL 1.3520
PHOD 1.3552 / PLOD 1.3508
Bullish = Open > 1.3552
Bearish = Open < 1.3508

The Euro closed Thursday’s trading session near the highs of the range, and with the narrow trading-range we saw we can expect to see a breakout type of day today with a slightly bullish tone to it.  We know the Dollar-Index-correlation is strong with the Euro, so we will be watching the Dollar-Index closely this morning, with new pending from Washington and the debt-deal.  We have some un-touched levels above us, and we will be waiting for the opening-bell to tell us who has control this morning at 8:20am EST. 
Targets above:        3564, 3567, 3575, 3580, 3595, 3611
Targets below:        3507, 3488

Gold Futures:
VAH 1303.4 / VAL 1296.2
PHOD 1312.0 / PLOD 1293.4
Bullish = Open > 1312.0
Bearish = Open < 1293.4

Gold traded in a very narrow trading-range on Thursday and closed the session right at the lows of the day.  This type of price-action suggests that today will be expanding type of day with larger trading-ranges and a bearish tone to it.  We know that traders will be watching the debt-deal closely in the US so we must be patient to see what Gold wants to do after the opening-bell at 8:20am EST.  we have targets to hit both above and below us today so we will be anxious to see who grabs control early in today’s session.
Targets above:        1314.6, 1315.4, 1322.0, 1323.5, 1326.0, 1328.5, 1330.8
Targets below:        1291.5, 1285.1, 1282.4

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Crude Oil Futures:
VAH 103.56 / VAL 102.02
PHOD 103.57 / PLOD 101.16
Bullish = Open > 103.57
Bearish = Open < 101.16

Crude Oil traded in a VERY wide trading-range on Thursday and closed the session right on top of the big-round-number 103.00 and in the middle of the day’s range.  This type of price-action suggests that today will be a narrow-range market personality and we will need to wait for clues from the opening-bell at 9:00am EST.  We can expect to see some reaction to the possible debt-deal in Washington this morning, which may moves markets higher on confidence in the deal going through.  Yesterday’s price-action tells us to expect sideways this morning, however we know that can change quickly with a whisper of a deal out of Washington so we will be watching closely.
Targets above:        103.60, 103.70, 103.90, 104.08, 104.19, 104.38
Targets below:        101.06

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Mini-Russell Futures:
VAH 1068.3 / VAL 1059.5
PHOD 1068.3 / PLOD 1054.1
Bullish = Open > 1068.3
Bearish = Open < 1054.1

The Mini-Russell, and most of the equity indexes, traded much higher on Thursday with a big GAP-up overnight and a relatively narrow trading-range to follow.  Price-action closed near the highs of the day and with the narrow trading-range we know to expect another breakout type of market personality this morning and we can assume there will be a bullish tone to it, especially if we open this morning at 9:30am EST above the 1068.3.  As we have said already, we know there will be reaction to news from Washington this morning so we will be waiting patiently to see who grabs control and where we open the session today at 9:30am EST.
Targets above:        1071.3, 1073.0, 1075.3, 1076.5, 1078.6, 1081.0
Targets below:        1048.2, 1045.0, 1039.5, 1038.5, 1034.7

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