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Cannon Trading Futures Blog: Daily Support and Resistance Levels

Thursday, October 26, 2006

Trading levels and reports for Oct. 27th

 
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Dear Trader,
 
FYI for tomorrow's reports (taken from Briefing.com ):
 

Release Details

GDP: Gross Domestic Product

  • Importance (A-F): This release merits a B.
  • Source: Bureau of Economic Analysis, U.S. Department of Commerce.
  • Release Time: Third or fourth week of the month at 8:30 ET for the prior quarter, with subsequent revisions released in the second and third months of the quarter.
  • Raw Data Available At: http://www.bea.doc.gov/bea/dn1.htm.
 

Highlights

  • Briefing.com Forecast:  GDP 2.0%, GDP price index 2.8%, final sales 2.3%.
  • Market Consensus:    GDP 2.1%, GDP price index 2.8%

Key Factors

  • Personal spending to be near 3.5%, from 2.6% in Q2 and 4.8% in Q1.   Durable goods led the stronger growth.
  • A rebound in business investment expected as well.  Structural spending soaring, equipment just above 2 quarter average.
  • Residential investment provides the drag, nearly twice the size of the Q2 plunge.
  • The trade deficit reached record highs in July and August as stronger imports (demand) leave a drag.
  • Government spending has been somewhat volatile.  Assuming 2% growth which may be understating the gain.
  • Inventory growth was slower than Q2 and will provide a small decline to growth.
  • Real final sales (GDP - inventories) are expected at a stronger 2.3% from 2.1% in Q2.
  • GDP price index to soften to 2.8% after three quarters at 3.3%.  PCE and core prices rose 2.3%.

Big Picture

  • Economic growth is slowing as the interest sensitive consumer sectors and the housing correction provide the swing.  The forward risk is that lowered business confidence slows the strong pace of capital investment and the manufacturing sector.  Lower energy prices will aid Q4 growth if they hold at these levels.   2006 growth will be based on moderating consumer spending (the Fed's intention) as business investment moderates but continues to provide a lift to the economy and manufacturing sector.  The drag from the trade deficit is expected to moderate (provided a lift in Q2) as inventory rebuilding shouldn't provide much of a swing.  Stimulative fiscal policy now contrasts with restrictive monetary policy as economic growth has softened but remains self-sustained.  Inflation risk remains but the slowing economy should help quell the pressures.  Little slack in the economy, a weak housing market and the remaining inflation risks are the Fed's concerns.

Release Details

University of Michigan Consumer Sentiment Index

  • Importance (A-F): This release merits a B-.
  • Source: The University of Michigan.
  • Release Time: Preliminary: 10:00 ET on the second Friday of the month (data for current month); Final: 10:00 ET on the fourth Friday of the month (data for current month).

Highlights

  • Preliminary October consumer sentiment 92.3 (+6.9 points, 8.1%).

Key Factors

  • A strong gain follows the September rise to leave a 13% two month jump. 
  • Lower fuel prices have provided the lift despite the slowing economy. 
  • Leaves October at the highest level since July 2005 -- pre Gulf Coast hurricane and oil price concerns.
  • Present situation component shot 10% higher, expectations rose 7% after a 15% September gain.
  • 1-year inflation expectations fell to 2.9%. 

Big Picture

  • A strong 13% two month gain follows 6 declines over the prior 8 months as energy prices rather than the economy drive the index.  Gasoline prices are the swing factor as strong labor conditions are being more than offset by high interest rates and global/domestic concerns.   The U Mich survey is significantly smaller (500 phone calls) than the Conference Board's, includes a longer outlook (for expectations) as questions are focused on the household compared to the business heavy CB survey.  A longer 2 year period shows a downward trend compared to the far brighter upward trend in the larger consumer confidence index.  The index far better tracks the consumers' mood than spending habits better indicated through interest rates and  income growth.
LEVELS:
 
Contract (Dec.. 2006)  SP500 (big & Mini) Nasdaq100 (big & Mini) Dow Jones (big & Mini) Mini Russell
Resistance 3 1407.27 1793.17 12301.00 795.87
Resistance 2 1401.23 1775.33 12257.00 787.93
Resistance 1 1397.07 1764.17 12223.00 783.62
Pivot 1391.03 1746.33 12179.00 775.68
Support 1 1386.87 1735.17 12145.00 771.37
Support 2 1380.83 1717.33 12101.00 763.43
Support 3 1376.67 1706.17 12067.00 759.12
         
Contract (Dec. 2006) Dec. Gold Euro Dec. Ten Years  Dec. US Bonds 
Resistance 3 611.7000 1.2859 107 30/32 112  5/32
Resistance 2 606.6000 1.2797 107 23/32 111 25/32
Resistance 1 603.2000 1.2760 107 19/32 111 18/32
Pivot 598.1000 1.2698 107 12/32 111  6/32
Support 1 594.7000 1.2661 107  8/32 110 31/32
Support 2 589.6000 1.2599 107  1/32 110 19/32
Support 3 586.2000 1.2562 106 29/32 110 12/32
 
REPORTS (EST): Provided by www.tradethenews.com audio news and interactive research directly from the pits
 

Friday, Oct 27th, 2006


Economic
08:30pm Q3 Advance GDP Annualized (last 2.6%), GDP Price Index (last 3.3%), Personal Consumption (last 2.6%), Core PCE QoQ (last 2.7%)
09:45pm Oct Final U. of Michigan Confidence (last 92.3)
Events
BEBE analyst meetings. Fed's Stern speaks on Policy in Minneapolis at 1:05pm. Trades Ex-dividend: TXN $0.04.
Earnings
Before the Open: ALEX AXL AVP BHI BWA BC CAH CVX CEG CVH DO EXC FSS FO HUN ICLR IDXX IR KDN KCI NOV NNI OVRL PNW SCG TBL WHQ. After the Close: AT EEP LPNT.
 
Note all time are EST. ANY AND ALL TIMES AND DATES ARE SUBJECT TO CHANGE WITHOUT NOTICE. INFORMATION HAS BEEN TAKEN FROM SOURCES DEEMED TO BE RELIABLE, BUT NO ASSURANCES CAN BE MADE TO THE ACCURACY OF ANY OF THIS INFORMATION.
 
 

This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!

Sincerely,

Ilan Levy-Mayer, M.B.A

Vice President
Cannon Trading Co Inc.
http://www.cannontrading.com
http://www.E-Futures.com
ilan@cannoncapital.com

Yahoo IM ilanlevy1970
310-859-9572
800-454-9572
Fax 310-859-0547
9301 Wilshire Blvd. Suite #614
Beverly Hills, Ca 90210

The finest compliment I can receive is a referral from a trusted client.
 
* Important Please Note: 
Trading commodity futures and options involves substantial risk of loss. 
The recommendations contained in this letter is of opinion only and does not guarantee any profits.
These are risky markets and only risk capital should be used.
Past performances are not necessarily indicative of future results. 
 

posted by Cannon Trading at 1:39 PM

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