Important Notices: The Week Ahead
Labor Day, Non Farm Payrolls
By John Thorpe, Senior Broker
Abbreviated Futures Market hours on Labor Day (Labor Day Schedule), Non Farm Payroll Friday, EIA Statistics for Crude and Natural Gas will be released Thursday due to the Holiday.
A heavy dose of economic data points will be released next week providing plenty of food for thought to chew on for the fed voting members as they continue to assess whether a freeze on Fed Funds or a reduction of .25 to .50 is the best medicine for the economy when they announce a rate decision September 20th.
CME FedWatch tool has the probability of a Fed Fund rate reduction on Sep 20th at 89.2 %, 10.8% chance of no reduction. This is a 30+ percentage point improvement from 1 month ago. The purpose of markets is to take in all information and adjust price according to that information.
Markets have already priced in this probability so it’s important to watch these numbers to see how the markets react today to these probabilities changing, I am talking about Precious metals (inflation), Bonds (long term rates following short term to varying degrees), the energy complex (cheaper capital higher demand), Equities (cheaper capital), Currencies (capital flows out of US dollar denominated assets to higher interest rate debentures)
The on again off again nature of Tariff and Russia/Ukraine war talks has created golden opportunities for breakouts in some markets, rangebound trades in others. (see gold commentary below) Crude Oil is knocking on the ceiling of it’s range near $65.00 bbl.
Remember to zoom out when reading your intraday time frame charts to daily and weekly time frames. December Gold is still rangebound! High end of the range this week trading above $3500.00 for the first time since august 8th. Last week I wrote this: This week, the psychological low was challenged in the 3350.00 area basis December and bounced, as of this writing, current price is 3420.00. Three weeks ago, I wrote this: Watch for the gold market to maintain its rangebound stance, close below 3350 (basis December) or above 3500 should denote a breakout, begin trading the December(Z) contract next week.
Two weeks ago, I wrote: Dec gold traded below 3350 today and the past three days but never closed meaningfully below 3350.0 (3348.60 Thurs.) Today we have breached $3500.00 oz with a high in the $3543.00 area per oz. while currently trading @$3493.00 oz as of this writing. Look for a close above $3500.00 on successive days to again accumulate longs.
This may be the break from this range we are looking for. Manage your downside risk according to your account size, risk no more than 15-20% whether with options or futures. Today, August 15th as of this writing that 3500.00 oz did not hold, always wait for confirmation prior to taking a position, several consecutive closes above or below a range is a start. We are teasing the bottom of the range today Dec gold in the 3380’s, I see psychological support @ 3350.00
Continued volatility to come as next week all markets will be reacting to whatever comes out of U.S. Govt leadership relating to conflicts cessation and trade deals, especially with China, India, Canada and Russia. Also, remember that Mexico’s extension will end October 29.
We’ll see you next week! Please enjoy a safe and memorable weekend.
Earnings Next Week:
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Mon. Labor Day
- Tue. Zscaler, Macy’s
- Wed. SalesForce, Hewlett-Packard, DollarTree
- Thu. Broadcom, LuLuLemon
- Fri. Baba
FED SPEECHES: (all times CDT)
- Mon. (holiday trade)
- Tues. Quiet
- Wed. 8:00 am, Musalem. 12:30 pm Kashkari (non vtg mbr)
- Thu. 11:05 am Williams, 6:00 PM Goolsbee
- Fri. Quiet
Economic Data week:
- Mon. Quiet (holiday trade)
- Tue. Redbook, Global PMI, ISM PMI , RCM/TIPP Optimism Index
- Wed. JOLTS, Beige Book, (EIA Crude Stocks moved due to L-Day Weekend), 17-week Bill auction
- Thur. ADP, Balance of trade, Initial Jobless claims, ISM PMI, 7:30 am EIA NAT GAS Storage, 11:00 am EIA Crude Stocks, Fed Balance sheet,
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Fri. Non Farm Payroll
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