Wednesday, October 23, 2013

Morning Prep 10/23/13;

8:00am EST

Focus-Points this morning:
·       Weakness in Asian markets having a negative impact on global equities this morning
·       European stocks fall off 5-year highs in overnight trading
·       Signs pointing to monetary tightening in China have some analysts concerned about the US equities which are at all-time highs
·       Spain emerges from a 2-year recession
·       Analysts report that Tuesday’s Non-Farm Payroll report severely ‘clouded’ the US economic outlook going into end of 2013
·       Gold is lower
·       Crude Oil is lower
·       EUR/USD is lower
·       E-Mini S&P is higher

Economic News on the schedule today:
This morning we will hear from Import/Export prices along with House Prices, however most traders in our live trade-room will be watching for the Crude Oil Inventories today at 1030am EST.

8:30am EST:             Import and Export Prices
9:00am EST:             FHFA House Price Index
10:30am EST:           Crude Oil Inventories

Levels this morning:

Euro Currency Futures:
Euro VIP Chart
VAH 3794 / VAL 3736
PHOD 3795 / PLOD 3675
Bullish = Open > 3795
Bearish = Open < 3675 

The Euro traded higher on Tuesday as the Dollar-Index got pushed lower after Non-Farm Payroll news was released. 

The Euro traded in a very wide range and closed at the highs, which suggests the buyers were in complete control from start to finish of the session.  The wide trading-range tells us today will likely be a narrower range, possibly a range-bound market today. 

Ahead of the opening-bell price-action is trading at 3750 which is in the middle of the range, so we are expecting a 2-sided trade this morning on the Euro.  We will be watching the first 15-minutes of price-action to get the clues we need to take our first trades this morning.
Targets above:        3780, 3794, 3810, 3830
Targets below:        3736, 3702, 3691, 3675

Gold Futures:
Gold VIP Chart
VAH 1344.6 / VAL 1328.9
PHOD 1344.7 / PLOD 1312.9
Bullish = Open > 1344.7
Bearish = Open < 1312.9

Gold traded higher on Tuesday above the PHOD of 1319.7 and closing the session near the highs of the day. 

We can see a very wide trading-range from the chart yesterday, and with the bullish tone to the market personality we can assume that buyers took control all day.  The wide trading-range tells us today is likely to be filled with range-bound-trading; however we will wait to see the opening-print to see if the bulls are still in control.
Targets above:        1341.3, 1344.6, 1348.5, 1353.4
Targets below:        1324.2, 1320.7, 1314.2, 1303.4

Crude Oil Futures:
Crude Oil VIP Chart
VAH 99.94 / VAL 98.65
PHOD 100.30 / PLOD 98.15
Bullish = Open > 100.30
Bearish = Open < 98.15

Crude Oil traded lower on Tuesday, extending the losses from Monday’s trading session, and keeping price-action below the psychological level of 100.00.

The clues we see from the VIP chart tells us that today is likely to continue the bearish move lower, however the wide range on Tuesday tells us that the price-action may be a little sideways this morning, but as always we will wait to see how the opening-print looks to confirm those concerns.

Ahead of the opening-bell price-action is trading all the way down to the 97.00 big-round-number, which is very bearish below the PLOD at 98.15.  Look for sellers to continue this push lower, and be open-minded to a price-reversal that moves us back up to fill today’s opening GAP-down.

Targets above:        97.57, 97.96, 98.15, 98.65, 99.21
Targets below:        96.72, 96.61, 96.22, 96.04, 95.52, 95.24

Mini-Russell Futures:
Russell VIP Chart
VAH 1114.6 / VAL 1110.4
PHOD 1120.5 / PLOD 1109.1
Bullish = Open > 1120.5
Bearish = Open < 1109.1

The Mini-Russell traded sideways on Tuesday with a very large trading-range that went to new highs, followed by a collapse in price-action over lunch and a closing-print in-balance right in the middle of the range. 

The narrow trading-range from yesterday suggests that today has the potential to be a big-mover, but we will need to wait and see how the price-action looks at the opening-bell.

As we prep before the opening-bell we can see the price-action is trading lower this morning at 1104.0, which tells us we may have a bearish opening-print with a gap-down.  We will be watching closely to see how the opening-print looks because the buyers may try to grab control at the open and fill the gap back higher to yesterday’s closing price of 1112.4.
Targets above:        1107.9, 1109.1, 1110.4, 1112.6, 1114.6, 1116.2
Targets below:        1100.0, 1095.3, 1092.2, 1090.7, 1085.2

E-Mini S&P Futures:
ES VIP Chart
VAH 1751.00 / VAL 1745.50
PHOD 1754.50 / PLOD 1741.75
Bullish = Open > 1754.50
Bearish = Open < 1741.75

The E-Mini S&P continued to push higher on Tuesday making new all-time highs in price above the 1754.00 mark.  

We saw a wider-than-average trading-range on Tuesday, and with the closing-print in the middle of the range we can assume today may be a little sluggish and range-bound at the open.

As we prep we see the price-action ahead of the opening-bell is trading at 1740.25 which is the previous week highs.  A move lower from here will give us a gap-down at the open, and we have 2 possible scenarios to consider.  First, the buyers may try to ‘fill the gap’ and push price higher at the open to test the 1749.50 closing-print from yesterday.  Second, the sellers are in control below the 1742.50 PLOD, so we may see the sellers continue to push new lower-lows and we will sell short along with them today.
Targets above:        1742.50, 1745.50, 1748.50, 1751.00, 1754.50
Targets below:        1739.50, 1736.50, 1734.75, 1732.25, 1730.25, 1728.50

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