Tuesday, October 15, 2013

Morning Prep 10/15/13; SchoolOfTrade.com

7:30am EST

Focus-Points this morning:
·       US Budget & debt Negotiations take on a very optimistic tone this morning ahead of the opening-bell in the US
·       Analyst suggest the extension will be for 6 to 9 months, and delay the medical device tax
·       News from Europe overnight was mixed; German ZEW & UK CPI
·       US Markets opened in Europe slightly higher as US press reports that Senate official are believed to be nearing an agreement
·       FDAX hits a record high and Eurostoxx50 hits 2.5 year highs

Economic News on the schedule today:

-Summary of Senate budget talks:
The Senate proposal provides for the reopening of the government through Jan 15 (at the current sequester levels funding) and raising the debt limit to Feb 15th.

Also, the proposal on extending debt limit through Feb 15 could require the Treasury be prevented from using any further "extraordinary measures" to extend the debt limit beyond that date. The proposal also provides for longer-term budget talks with the aim of reaching an agreement by Dec 13th.

-(US) Certain Republicans in the House of Representatives could show resistance toward the budget/debt deal proposed by the Senate

- US financial press; Most House Republicans have declined to comment on the Senate proposal as they are waiting for the measure to become final.

News this morning:

The Empire state manufacturing report has been showing monthly growth, and today we will see how the month of October is looking in the state of New York.

8:30am EST:             Empire State Mfg Survey
10:00am EST:           William Dudley Speaks

11:10am EST:           John Williams Speaks

Levels this morning:

Euro Currency Futures:
VAH 3592 / VAL 3572
PHOD 3602 / PLOD 3563
Bullish = Open > 3602
Bearish = Open < 3563

Euro VIP Chart
The Euro traded to new highs on Monday in a narrow trading-range on light volume caused by the US Holiday.  We can see the closing-print occurred near the lows of the day, which suggests that an open below the 3563 will result in a selloff down to 3545, and possibly the lows from last Friday at 3526.  If we open inside yesterday’s trading-range we will have to wait and see who grabs control of the price-action at the opening-bell at 820am EST:
Targets above:        3611
Targets below:        3545, 3526, 3520, 3508, 3488

Gold Futures:
VAH 1287.3 / VAL 1279.7
PHOD 1287.4 / PLOD 1275.1
Bullish = Open > 1287.4
Bearish = Open < 1275.1

Gold VIP Chart
Gold traded lower on Monday, closing near the lows of the session on very light volume and a narrow trading-range.  This type of price-action suggests that the sellers took control late in the session on Monday, so an opening-print this morning at 820am EST below the 1275.1 will have traders shooting for targets below at 1272.0, 1267.5 and 1263.0.  Look for a change in the direction if we open today above 1289.3 with a target of 1293.4 if the buyers take control.  Furthermore, we know the debt agreement is on the way most likely, which will be very bearish for Gold Futures, we will be watching the developments in Washington closely this morning. 
Targets above:        1289.3, 1293.4, 1296.0, 1300.0, 1303.3
Targets below:        1272.0, 1267.5, 1263.0, 1259.6

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Crude Oil Futures:
VAH 102.29 / VAL 101.31
PHOD 102.62 / PLOD 101.06
Bullish = Open > 102.62
Bearish = Open < 101.31

Crude Oil VIP Chart
Crude Oil traded higher on Monday morning on very light volume and in a typical trading-range.  We can see the closing-print on Monday afternoon ended the session near the highs, which was also near the middle of the weekly trading-range, and suggests that buyers may grab control this morning at the 900am EST opening-bell.  Look for an opening-print above the PHOD of 102.62 for another bullish trading session, and also look for a potential reaction this morning to the developments coming out of Washington.  If we continue to hear rumors of a solution at the White House Crude Oil and other commodities will certainly rise, and we will start buying along with it.  As always, we will look for clues at 900am EST when the opening-bell rings.
Targets above:        102.79, 103.20, 103.55, 103.70, 103.90
Targets below:        101.06, 100.60

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