Commodity Trading School Futures Market Summary

SUMMARY OF UPCOMING DATA 12/22/09
8:30 AM US PERSONAL INCOME (0.5%)
9:55 AM US CONSUMER SENTIMENT (73.5)
10:00 AM US NEW HOME SALES (440K)
10:30 AM EIA PETROLEUM INVENTORY REPORT.
11:00 AM US 2, 5, 7 YEAR NOTE ANNOUCEMENTS
DATA RESULTS 12/21/09
US GDP-FINAL 3RD QUARTER (2.2%/2.7%)
US EXISTING HOME SALES (6.54 M/6.25 M)
FHFA HOUSE PRICE INDEX (0.6)
US DEBT REVIEW AND OUTLOOK
US 30 YEAR FUTURES continued to drop on Tuesday, as those taking part in the relatively light trading volumes focused on maintaining the “Santa Rally” with regards to equities, continuing to fuel support for economic recovery (and potential inflation) in 2010. The outlook continues to essentially do the work of the Fed by increasing interest rates as traders and investors continue to seek risk and returns composite with the potential rise in prices expected from the global recovery.
Markets focused on the positive side of data today, taking cues from the better than expected reading of US existing home sales while shrugging off the weaker than expected readings and revisions for US 3rd quarter GDP. The looming threat of new US debt supply continues to pressure prices, as traders await the release of figures for next week’s US 2, 5, and 7 year note auctions. Many expect that the markets could stage of short covering rally near or after the release of the auction figures, as traders stage a “sell the rumor, buy the fact strategy” and square up short positions ahead of the Christmas holidays.
Technically, 30 year Treasury futures continue in a down trend, with 115-18 setting up as a downside level of support. Upside resistance on a short covering rally appears to set up at 116-23.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES continued their cautious climb, trying to be good for the “Santa Rally”. Elements that supported gains in the major averages included continued stabilization in the US Dollar and a better than expected reading on US home sales. The quietly optimistic mood was still strong enough to shrug off a downward revision to US GDP (Gross Domestic Product) and another downgrade of Greek Sovereign Debt.
Energy and technology stocks were among the best performing sectors of the session. Energy stocks gained after crude oil prices rebounded on short covering and perceptions of improving demand going into 2010, as well as having the OPEC decision out in the open. Technology stocks continue to gain global focus, as demonstrated by Google, which closed over $600.00 for the dirst time since early 2008.
Technically, S&P should continue to range trade, with 1118.00 as initial breakout point. Support for the range continues to hold at 1094.00. (click on the charts to enlarge).
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Prepared by Rich Roscelli & Paul Brittain.
Please email questions or comments to rich@binvstgrp.com
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Commodity Trading School, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

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