Will Day 3 of The Fed’s farewell tour be less stressful for the markets?

Global Economic Calendar June 20th-21st  2013

 

*Actual data releases for today

Data release times are in GMT or specified US EST (Eastern Standard Time) Figures posted are estimates unless specified otherwise

Data in italics-high potential to influence markets

 

Click here to hear audio commentary for Economic Calendar

*Thursday-6:58 AM France Flash Manufacturing PMI (Purchasing Managers Index) 48.3, France Flash Services PMI 46.5—7:28 AM German Flash Manufacturing PMI 48.7, German Flash Services PMI 51.3—7:58 AM Eurozone Flash Composite PMI 48.9, Eurozone Flash Manufacturing PMI 48.7, Eurozone Flash Services PMI 48.68:30 AM UK Retail Sales (ex Auto & Fuel) m/m 2.1%, y/y 2.1%, UK Retail Sales (inc auto & fuel) m/m 2.1%, y/y 1.9%  8:30 AM EST US Initial Jobless Claims 354,000—10:00 AM EST US Existing Home Sales 5.18 million units, US Leading Indicator m/m 0.1%, US Philadelphia Fed Survey Index 12.5 10:30 AM- EST EIA Inventory Report (Natural Gas +91 BCF)

FridayUS Markets-Quadruple Witching takes place

 

MARKET SETTLEMENT PRICES June 20th 2013

MARKET OPEN HIGH LOW SETTLE NET CHANGE *Click for delayed update prices
Sept E MINI S&P 1620.75 1623.00 1577.00 1583.75 -39.75 E Mini
Sept US 10 YR Notes 127^185 127^200 126^205 127^065 -26/32 US 10yr note
August Crude Oil 98.20 98.22 94.63 95.14 -3.34 WTI Crude Oil

 

 

*Tokyo Nikkei opens down over 200 pts on US follow through weakness   For delayed prices, click here

*Delayed Price Updates from CME Group www.cmegroup.com

 

 

 

THIS WEEK’S MARKET OUTLOOK CATEGORIES

EQUITIES…. Sept E Mini S&P’s joined the majority of global financial products in trying to plan for a second session “the good bye party” for QE3…the final chapter?. Market sentiment became more negative through the session. Gold dropped to a 2 ½ year old, Treasuries & US Dollar based commodities all fell through significant support levels as the surprise of Fed Chairman Bernanke’s statement that the Federal Reserve will seek to taper (or lessen) its monthly purchases of government and mortgage backed securities sooner rather than later. Negative sentiment gained significant momentum on growing speculation the US Fed may begin to lessen its purchases as soon as the September Federal Reserve meeting. This sent many long positions in equities that had been holding out waiting for another recovery rally after the break through 1600 running for cover by the mid afternoon when it seemed clear that no relief rally was in store for today.

The markets took their cues from the near panic of uncertainty, choosing to essentially put aside the relatively strong US data on existing home sales and business sentiment coming out of the Philadelphia area. It seems that at least for the near term, data that may offer support as to WHY the Fed sees a possible end to QE3 is going to be shoved to the side as the long built up frustration of contrarian bears have their way as the market tries to find a new sense of value without the certainty of the US Fed asset purchases propping things up. So the question now begins to form; US fiscal policy…what have you got to show the markets now??

Technically, the markets strong break seems to have completed the head & shoulders pattern that appeared to be forming back on June 13th. Today’s downward move brings the Sept contract back to levels last traded in early May.  RSI on the daily chart comes in around 37.9, suggesting that the market may have room to test further downside, however an additional catalyst may be required. Recovery rebounds are likely to find significant near term resistance at the 1593.00 & 1598.00 level. This point represents a slight price level gain just above what could be forming as a triple top just above the lower daily Keltner channel. With Friday being quadruple witching day, a battle near the 1600 level may form for the sake of option players trying to attack or defend expirations of S&P 1600 strikes. The market’s upside energy does look tired, so rebounds are likely to be limited to strong resistance at the 1606.00 level. Price levels if downside momentum continues could find some initial support at 1573.00, with a break of this level setting up a test of a significant level at 1567.00. A close here could offer confirmation of a significant downtrend forming rather than a correction.

 CLICK HERE FOR CHART

 

 

Sept US 10 year notes continued to fall as the markets try to access the economic landscape that will form in a post QE3 world. The long end of the yield curve was hit most dramatically, with better than expected economic data and mounting concerns about banking liquidity issues out of China has market participants continuing to flee from fixed income into cash assets, which with rising rates, are not looking as tedious as they once did. Again, Cash is for the moment not so much of a four letter word.

September 10 years broke again to new lows, moving beyond the initial downside target setup at 126^280. This level could continue to offer initial support, though another break and move to test 126^230 could set up a possible downside target of 126^120, which could set up support as this level would likely have a corresponding yield in the relatively attractive 2.48-2.50 % range. Initial resistance on a recovery appears to be setting up just above the Fibonacci level at 127^120. A break of this level could result in the contract trying for a step up recovery to test 127^180 & 127^215. Resistance at 127^245 could be significant.

CLICK HERE FOR CHART

 

 

August Crude Oil broke through support of its current trading as global economic concerns regarding the US Federal Reserve tapering back its assets purchases. August Crude oil plummeted over $3.00 in the regular session.

Technically, the August contract appears sandwiched between two key Fibonacci levels which could offer additional downside momentum to build if the market can break through the 94.51 level. This could lead to a downside target of 93.87 in the near term. Initial resistance for the contract sets up just above the mid Keltner channel at 96.01, with a breakout of this level possibly setting up an upside target back to 96.62. This resistance point could fall if the range narrows at these lower levels.

 CLICK HERE FOR CHART

 

 

 

Charts courtesy of http://www.openecry.com (Gann Financial LLC)

 

To open an account with me at Great Pacific Trading Company, as well as any questions or thoughts you would like to discuss, e-mail me at rroscelli@gptc.com

About the author-Richard Roscelli has been a member of the futures industry since 1994. His unique background in the Global Futures markets stems from his experience managing trading desks for major financial institutions and commodity trading advisors.

After earning an MBA in Global Business, Richard is now a co branch manager and licensed broker with Great Pacific Company of Las Vegas. He is a regular contributor to financial publications and websites focused on futures trading and alternative investments.

References

www.ft.com/research/Economic-Calendar

www.bloomberg.com

www.morningstar.com

www.cmegroup.com/trading

www.investopedia.com/terms

 

You can reach me at rroscelli@gptc.com for questions, comments, and information about opening an account with Great Pacific Trading Las Vegas. Follow me on Twitter @richardroscelli

**The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 

**The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 

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