Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday May 6, 2014
For 2014 I would like to wish all of you discipline and patience in your trading!
TradeTheNews.com Weekly Market Update: No Mayday for Steady Markets
– Data out this week suggested that, like much else in the US economy, the housing industry will also bounce back from its winter weather slump. The pending home sales data saw its first positive m/m reading in nine months in March, widely beating expectations. Data out last week showed that existing home sales fell to their lowest levels in nearly two years in March, but the pending homes report suggests the downward trend may have run its course. While there is hope for further improvement in the housing market, it looks like there is little chance for housing reform in Washington, DC this year. The Senate Banking Committee scheduled an April 29th markup session for the GSE reform bill, but with committee work starting so late in the session there is little chance for much to get done before Congress shifts into full-on election mode.
– Federal prosecutors are planning criminal charges against BNP Paribas and Credit Suisse Group for separate alleged offenses, raising fears that one or both could possibly be forced out of the US market. The DoJ is seeking criminal charges against BNP for allegedly skirting economic sanctions against Iran, and charges against Credit Suisse for helping clients avoid taxes. Reportedly BNP faces charges of up to $2 billion, and while there are said to be discussions of ways to avoid revocation of the bank’s New York charter in case of a guilty verdict, the Fed still might move to take away its licenses. Elsewhere in the annals of financial misbehavior, Bank of America disclosed an embarrassing error in calculating its capital ratios, forcing it to suspend capital returns to shareholders and redo its CCAR submissions to the Fed.
– Rising crude and natural gas prices were the trend in the first quarter, although not all of the global oil majors benefitted equally from the improved pricing environment. ConocoPhillips and Exxon reported much better-than-expected first quarter results, although Exxon’s lower upstream production pulled profits down on a y/y basis while Conoco’s higher production boosted its profits. Both beat consensus EPS estimates. Meanwhile, Chevron missed both top- and bottom-line expectations as production fell 2% y/y and weaker refining margins hurt bottom-line results. BP’s profits slumped and revenue was down significantly as the company continues to shed assets. BP’s profit from its Rosneft joint venture shrank by 75% in the quarter thanks to the Ukraine crisis weakening the ruble.
– April auto sales were mixed. General Motor’s sales gained 6.9%, more than expected, Chrysler slightly topped expectations and Ford missed. A GM sales executive said retail demand was steady in the month as the economy continues to strengthen. Toyota and Nissan’s sales were very strong, up 13.3% y/y and 18.3% y/y, respectively. Ford was the only major auto firm to report a decline in monthly sales, however truck sales remained very strong, with overall April sales +8%, twice the March gain. In addition, Ford announced that CEO Alan Mulally would step down as chief on July 1st. Over his eight-year term, Mulally transformed Ford from a money-loser to a thriving firm. He will be replaced by Mark Fields, the current chief operating officer.
– Pharmaceutical industry deal making continued after last week’s big announcements. There were repeated reports that Allergan would make a second attempt to acquire Shire to fend off Valeant’s $46-billion unsolicited bid, or even try to sell the company to Johnson & Johnson or Sanofi. AstraZeneca disclosed this week that back in January, Pfizer had offered £46.61/share to acquire the firm was rebuffed, and that Pfizer had renewed its approach. On Friday, Pfizer hiked its offer for AstraZeneca to approximately £50.00/share, valuing the firm at more than $106B. Forest Laboratories said it would buy Furiex Pharmaceuticals for $1.5 billion to get access to its gastrointestinal disease treatments. In other deal news, the contest to acquire Alstom’s energy units is now between Siemens and General Electric, with bids said to be running around €11-12 billion.
– The eagerly awaited Eurozone April annualized CPI was slightly lower than expected, at +0.7% versus +0.8%e, while core was in-line at +1.0%. Recall that the March figure that really lit the fire under QE talk was a mere +0.5%, so the slight increase lent some credibility to ECB assertions that the Eurozone will avoid deflation. In a meeting with German legislators, President Draghi said there was still no chance of deflation in the Eurozone and that launching a QE program was only a distant possibility. EUR/USD traded in only a slightly broader range than last week, between 1.3800 and 1.3890.
– UK GDP saw its fifth consecutive quarter of growth in Q1, with the advance annualized figure at +3.1%, up from +2.7% in the final quarter of 2013. This was the highest annualized rate of growth seen in six years, and BoE Governor Carney said the data shows the UK is entering a sustainable recovery. GBP/USD hit a fresh 4-year highs above 1.6900 toward week’s end.
– The Bank of Japan held pat in its policy statement out this week and cut its GDP forecast for the FY14/FY15 period to +1.1% from +1.4% prior, and maintained its inflation outlook for the period. This marked one year since the bank launched its ambitious program to double the monetary base and achieve 2% inflation within two years. The March labor cash earnings report – a closely watched gauge of consumer “cost-push” inflation from salaries – moved to a two-year high of +0.7%, giving government officials a reason to celebrate Abenomics. However, the April Markit manufacturing PMI saw its first contraction in over a year, with both output and new export orders components in contraction as well. USD/JPY spent most of the week locked in the 102 handle, only briefly surging above 103 in the immediate aftermath of the US jobs report on Friday.
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|Contract June 2014||SP500 (big & Mini)||Nasdaq100 (big & Mini)||Dow Jones (big & Mini)||Mini Russell||Dollar Index|
|Contract||June Gold||July Silver||June Crude Oil||June Bonds||June Euro|
|Resistance 3||1333.9||2001.2||101.79||137 4/32||1.3906|
|Resistance 2||1324.8||1987.8||101.12||136 26/32||1.3896|
|Resistance 1||1317.8||1975.2||100.26||136 9/32||1.3885|
|Support 1||1301.7||1949.2||98.73||135 14/32||1.3864|
|Support 2||1292.6||1935.8||98.06||135 4/32||1.3854|
|Support 3||1285.6||1923.2||97.20||134 19/32||1.3843|
|Contract||July Corn||July Wheat||July Beans||July SoyMeal||July bean Oil|
|TueMay 6||3:00am||EUR||Spanish Unemployment Change||-49.1K||-16.6K|
|3:15am||EUR||Spanish Services PMI||54.3||54.0|
|3:45am||EUR||Italian Services PMI||51.2||49.5|
|4:00am||EUR||Final Services PMI||53.1||53.1|
|5:00am||EUR||Retail Sales m/m||-0.2%||0.4%|
|All Day||EUR||ECOFIN Meetings|
|10:00am||USD||IBD/TIPP Economic Optimism||47.6||48.0|
|5:30pm||USD||FOMC Member Stein Speaks|
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 here in 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.