Monday, October 14, 2013

Morning Prep 10/14/13; SchoolOfTrade.com

7:30am EST

Focus-Points this morning:
·       Traders in the US celebrate Columbus Day Holiday, most markets open, however bonds, banks and most schools are closed, volume expected to be lower-than-average as a result of this
·       Canada Celebrates Thanksgiving Holiday today; markets closed
·       The US Govt Shutdown enters into its 3rd week
·       Talks over the weekend at the White House yield no results as Obama argues with Republicans over the duration of the debt ceiling extension
·       Many analysts now think that the deal in Washington will not happen until they see ‘panic’ in the price-action
·       Chinese exports show a surprising decline, first in 6 months, suggests a slowing global economy
·       European markets trading lower this morning after talks at the White House yield no results
·       E-Mini S&P -.50%
·       Crude Oil: -.75%
·       Euro +.25%
·       FDAX -.25%
·       Gold +1.00%

Economic News on the schedule today:
Markets are expected to be sluggish this morning as traders in the US and Canada are celebrating Holidays today.  Most markets are open, however, the bond market is closed, schools and banks are closed so most traders will expect to be either sitting on the sidelines today or trading very cautiously. 

Ben Bernanke is scheduled to speak at the Bank of Mexico in Mexico City this morning and we don’t know if he will touch on the topic of the US Govt shutdown. 

In our live trade-room we will be trading half-size and will be focused on listening for new developments in the White House.

8:00am EST:             Ben Bernanke Speaks

Levels this morning:

Euro Currency Futures:
VAH 3571 / VAL 3543
PHOD 3578 / PLOD 3526
Bullish = Open > 3578
Bearish = Open < 3526

The Euro closed on Friday in the middle of a typical trading-range that has been moving higher over the last 3 trading sessions.  With 3 days of higher-highs and higher-lows we can expect to see more bullish market sentiment on Monday morning, however, the fact that the closing-print on Friday was in the middle of the trading-range tells us that anything is possible when we open the trading floor today at 8:20am EST.  We will be looking for the opening-bell to tell us what direction the traders want to take it this morning, and we will react from there.
Targets above:        3578, 3595, 3609, 3611
Targets below:        3520, 3508, 3488

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Gold Futures:
VAH 1271.9 / VAL 1263.1
PHOD 1289.3 / PLOD 1259.6
Bullish = Open > 1289.3
Bearish = Open < 1259.6

We saw a large GAP down going into the end of the week last week, along with a very narrow trading-range on Friday in the Gold Futures market.  We closed the day on Friday in the middle of the trading-range which suggests that market sentiment was balanced when we closed the week.  The narrow trading-range on Friday suggests that Monday will be a possible large-range day, however, with the bond markets closed and the Columbus Day holiday we will have to wait for the opening-bell at 8:20am EST before we can make an assumptions for volatility this morning.
Targets above:        1293.4, 1296.3, 1300.5, 1303.6, 1305.1, 1312.0, 1315.4
Targets below:        NA

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Crude Oil Futures:
VAH 101.81 / VAL 101.23
PHOD 102.13 / PLOD 100.60
Bullish = Open > 102.13
Bearish = Open < 100.60

Crude Oil traded in the relatively-narrow trading-range on Friday and closed the session right at the highs of the day, which suggests that Monday will be a breakout type of day with a bullish market sentiment.  We have some un-touched levels overhead that will act as price-magnets this morning, however, the lack of participation due to the US Holiday may have us sitting on hands this morning so we will wait patiently to see how the opening-bell looks at 9:00am EST and then make a decision after we see the market personality for the first 15-minutes of the session.
Targets above:        103.20, 103.55, 103.70, 103.90, 104.08, 104.19, 104.38
Targets below:        NA

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Mini-Russell Futures:
VAH 1082.4 / VAL 1069.8
PHOD 1083.3 / PLOD 1063.4
Bullish = Open > 1083.3
Bearish = Open < 1063.4

The Mini-Russell traded higher on Friday in a very wide trading-range and closed the week at its high of the day.  This type of trading-range and closing-print on Friday suggests that Monday will likely be a range-bound market with a slight bullish market sentiment.  As with the other markets this morning we will be waiting for the opening-bell to tell us more clues today at 930am EST because of the holiday and the most-likely lower volume we may have to sit-on-hands this morning if the price-action isn’t enough.  Look for a bullish opening-bell this morning for a good sign that markets are still very confident in a solution from the US and we will start buying.
Targets above:        1084.0, 1086.8
Targets below:        1059.5, 1054.1, 1048.2, 1045.0, 1040.0, 1038.5

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