Top Day Recommendations
9.22.11
Operation Twist (as the Fed shifts 400 billion from the short end to the log end) has given the long end of the bond market yet another boost while China continues to contract. The big one way ride hasn’t been gold or silver but the 30 year treasury. As measured by the NOB spread (notes against Bonds; 10 years against 30 years) we are headed back to the 2008 Lehman Brothers highs. See chart.
Amazing, isn’t it? Well. Operation Twist flattens the yield curve and makes it more difficult for banks to make money as they borrow short to lend long. When the NOB to be over 1400 strongly consider the spread.
It wasn’t that long ago that bonds were at a discount to notes. Of course the nail in the coffin was a statement in the communiqué by the Federal Reserve that the economy looks fairly week going forward. This coupled with the Chinese economic contraction, Euro Zone worries, fears about the European banking system and the failure of the troika (EU, ECB and IMF) to act in a bold, forceful manner have all contributed to the valuations we are looking at this morning.
Week of September 19 - September 23
|
Date |
ET |
Release |
For |
Actual |
Briefing.com Briefing.com |
Prior |
Revised |
|
|
|
|
|
|
|
|
Forecast |
Consensus |
|
From |
|
|
Sep |
10:00 |
NAHB Housing |
Sep |
|
15 |
15 |
15 |
|
|
|
19 |
Market Index |
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||
|
Sep |
08:30 |
Aug |
|
575K |
592K |
604K |
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|
|
20 |
|
|
|
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|
|
Sep |
08:30 |
Aug |
|
575K |
588K |
597K |
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|
20 |
|
|
|
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|
|
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|
Sep |
07:00 |
MBA Mortgage Index |
09/17 |
|
NA |
NA |
+6.3% |
|
|
|
21 |
|
|
|
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|
Sep |
10:00 |
Aug |
|
4.50M |
4.70M |
4.67M |
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|
21 |
|
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|
Sep |
10:30 |
Crude Inventories |
09/17 |
|
NA |
NA |
-6.7M |
|
|
|
21 |
|
|
|
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|
Sep |
14:15 |
FOMC Rate Decision |
Sep |
|
0.25% |
0.25% |
0.25% |
|
|
|
21 |
|
|
|
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Sep |
08:30 |
09/17 |
|
412K |
417K |
428K |
|
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|
22 |
|
|
|
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|
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|
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|
Sep |
08:30 |
09/10 |
|
3710K |
3730K |
3726K |
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|
22 |
|
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Sep |
10:00 |
FHFA Housing Price |
Jul |
|
NA |
NA |
0.9% |
|
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|
22 |
Index |
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|
Sep |
10:00 |
Aug |
|
0.0% |
0.1% |
0.5% |
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|
22 |
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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
Trend S2 S1 DS DR
R1 R2
|
Dec |
N |
1092.2 |
1152.00 |
1122.7 |
1180.00 |
1243.00 |
12 74.25 |
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Eminifile |
|
5 |
|
5 |
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S+P |
|
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|
|
|
Dec Emini |
PRD |
2053 |
2180 |
2195.5 |
2294.25 |
2371 |
2435 |
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0 |
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|
Naz |
(D) |
|
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|
Dec Yen |
P |
128.30 |
129.28 |
130.24 |
131.98 |
131.02 |
131.78 |
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Dec EC |
P |
133.12 |
135.47 |
134.20 |
137.86 |
139.71 |
141.60 |
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|
Dec 10 |
N |
127.27 |
128.22 |
130.09 |
131.13 |
134.24 |
131.31 |
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Year |
|
|
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|
|
|
|
|
|
Dec 30 |
P |
136.24 |
138.03 |
141.18 |
145.01 |
141.12 |
143.10 |
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Year |
|
|
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|
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|
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Nov |
N |
12.97 |
13.26 |
13.03 |
13.37 |
14.08 |
14.61 |
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Soybeans |
|
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Dec Corn |
N |
6.53 |
6.72 |
6.77 |
6.93 |
7.30 |
7.68 |
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|
Dec Gold |
P |
1715.3 |
1765.10 |
1764.4 |
1824.50 |
1864.90 |
1914.90 |
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0 |
|
0 |
|
|
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Dec Silver |
N |
38.36 |
39.53 |
38.89 |
41.01 |
41.73 |
42.76 |
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|
Dec |
N |
380 |
387 |
365 |
380 |
401 |
408 |
|
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Copper |
|
|
|
|
|
|
|
|
|
Nov |
P |
8252 |
8530 |
82.77 |
87.72 |
9073 |
9338 |
|
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Crude |
|
|
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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.