Top Day Recommendations
7.08.011
As Thursday’s ADP private jobs forecast was significantly better than expected many on The Street were upwardly revising their government unemployment number for today. Consensus had been for 105K. The whisper number is 150K. Actually, the ADP has had about a 52% correlation to the government number so it’s just north of a coin flip. Certain things were undeniable on Thursday; FedEx at a 52 week high is significant as a barometer of business activity. Looking in the rear view mirror, the fly in the ointment may be the U of M consumer confidence number which wasn’t that buoyant and may not reflect job growth.
The ECB raised rates and this drove cash flows to the EC, particularly at the expense of the Swiss Franc. Of course higher ECB rates only further stresses the PIGS. The true star of yesterday’s action was copper, for many a stock market proxy as well as a marker for China. Notice how the bottom Bollinger is bending away from the current price, a technical sign of strength. It’s almost amazing for the VIX to be plunging in front of a continuing US budget impasse and a tenuous European credit situation which continues to be addressed by perpetual rollover. Maybe this is all just a run-up to an Mayan 2012? Hopefully not. Out of the three stages of Fear, Hope and Greed, the market is clearly in the zone of Hope.
Same store retail sales were also excellent for June, somewhat of a surprise (this is summer, not Christmas, not back to school). And technology was also strong. The Nasdaq/S+P spread has been a straight line scream for the past 10 sessions leaving it seriously overbought.
So where does this leave us? The rally took many "long only" guys by total surprise and under positioned (sell in May and walk away) so in terms of psych expect selloffs to be contained as long as the Euro theater remains reasonably quiet while crude oil looks capable of tagging the upper Bollinger as the RSI isn’t overbought.
Week of July 04 - July 08
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From | ||||||
| Jul 05 | 10:00 | Factory Orders | May | 1.0% | 1.0% | -1.2% | ||||||||
| Jul 06 | 07:00 | MBA Mortgage Index | 07/02 | NA | NA | -2.7% | ||||||||
| Jul 06 | 07:30 | Challenger Job Cuts | Jun | NA | NA | -4.3% | ||||||||
| Jul 06 | 10:00 | ISM Services | Jun | 52.0 | 54.0 | 54.6 | ||||||||
| Jul 07 | 08:15 | ADP Employment Change | Jun | 50K | 60K | 38K | ||||||||
| Jul 07 | 08:30 | Initial Claims | 07/02 | 425K | 425K | 428K | ||||||||
| Jul 07 | 08:30 | Continuing Claims | 06/25 | 3700K | 3700K | 3702K | ||||||||
| Jul 07 | 11:00 | Crude Inventories | 07/02 | NA | NA | -4.375M | ||||||||
| Jul 08 | 08:30 | Nonfarm Payrolls | Jun | 75K | 80K | 54K | ||||||||
| Jul 08 | 08:30 | Nonfarm Private Payrolls | Jun | 95K | 110K | 83K | ||||||||
| Jul 08 | 08:30 | Unemployment Rate | Jun | 9.2% | 9.1% | 9.1% | ||||||||
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From | ||||||
| Jul 08 | 08:30 | Average Workweek | Jun | 34.5 | 34.4 | 34.4 | ||||||||
| Jul 08 | 08:30 | Hourly Earnings | Jun | 0.2% | 0.2% | 0.3% | ||||||||
| Jul 08 | 10:00 | Wholesale Inventories | May | 1.0% | 0.9% | 0.8% | ||||||||
| Jul 08 | 15:00 | Consumer Credit | May | $3.0B | $3.5B | $6.5B | ||||||||
- Numbers are good up until the close of business today. These are strictly technical in nature, not fundamentally based or biased.
Legend
P is Positive
N is Negative
PRD is Potential Reversal Day
S2 is strong support
S1 is good support
DS is Daily Support
DR is Daily Resistance
R1 is Good Resistance
R2 is Strong Resistance
Levels are for the most active futures contract
Daily Support and Resistance
Some of these numbers are badly skewed due to Monday’s holiday when some markets were closed, others open
Trend S2 S1 DS DR R1 R2
| Sept Emini S+P | P | 1223 | 1282 | 1340 | 1357 | 1361 | 1388 |
| Emini Naz | P | 2133 | 2244 | 2388 | 2429 | 2413 | 2471 |
| Yen | N | 122.28 | 123.43 | 122.72 | 123.67 | 124.54 | 123.56 |
| EC | P) | 139.06 | 141.92 | 142.25 | 143.79 | 144.39 | 148.06 |
| Sep 10 Year | N | 119.18 | 150.25 | 122.05 | 122.26 | 124.03 | 126.07 |
| Sep 30 Year | N | 119.07 | 120.30 | 122.27 | 123.26 | 125.20 | 128.19 |
| Sept Soybeans | P | 12.56 | 12.83 | 13.22 | 13.43 | 13.37 | 13.64 |
| Sept Corn | N | 5.41 | 5.74 | 6.16 | 6.335 | 6.68 | 7.29 |
| August Gold | P | 1456.7 | 1471.7 | 1523.5 | 1536.2 | 1507 | 1529 |
| Sept Silver | P | 32.23 | 33.12 | 35.94 | 36.89 | 34.95 | 35.90 |
| Sept Copper | P | 427 | 429 | 436.40 | 448.20 | 433 | 435 |
| Aug Crude | P | 94.35 | 94.67 | 97.30 | 99.73 | 95.39 | 95.79 |
N.B.: if you initiate a trade using ANY of these
numbers use a STOP at least equivalent to 2 ½%.
Repeat: use Stops. Don’t think about using Stops.
Use Stops. Some find it appropriate to look at the
margin requirement and use that as a Stop or if
it’s a steep initial requirement, use half. But
whatever you do, stop thinking about any other
alternative and use Stops.
********************************************
Futures trading entails considerable risk and is not for
everyone. An account can lose more than its initial investment.
Stops are not necessarily filled at the stop level. Past
performance is not a guarantee of future results.
.
Charles Kespert
***********************
HYPOTHETICAL PERFORMANCE RESULTS HAVE
MANY INHERENT LIMITATIONS, SOME OF WHICH
ARE DESCRIBED BELOW. NO REPRESENTATION IS
BEING MADE THAT ANY ACCOUNT WILL OR IS
LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR
TO THOSE SHOWN. IN FACT, THERE ARE
FREQUENTLY SHARP DIFFERENCES BETWEEN
HYPOTHETICAL PERFORMANCE RESULTS AND THE
ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY
ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL
PERFORMANCE RESULTS IS THAT THEY ARE
GENERALLY PREPARED WITH THE BENEFIT OF
HINDSIGHT. IN ADDITION, AL TRADING DOES NOT
INVOLVE FINANCIAL RISK, AND NO
HYPOTHETIOTHETICAL TRADING RECORD CAN
COMPLETELY ACCOUNT FOR THE IMPACT OF
FINANCIAL RISK IN ACTUAL TRADING. FOR
EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR
TO ADHERE TO A PARTICULAR TRADING PROGRAM
IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS
WHICH CAN ALSO ADVERSELY AFFECT ACTUAL
TRADING RESULTS. THERE ARE NUMEROUS OTHER
FACTORS RELATED TO THE MARKETS IN GENERAL
OR TO THE IMPLEMENTATION OF ANY SPECIFIC
TRADING PROGRAM WHICH CANNOT BE FULLY
ACCOUNTED FOR IN THE PREPARATION OF
HYPOTHETICAL PERFORMANCE RESULTS AND ALL
OF WHICH CAN ADVERSELY AFFECT ACTUAL
TRADING RESULTS.