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Market Recap & Economic Reports 10.27.2015

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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 October 27, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

From our friends at TradeTheNews.com, weekly recap and what to look for in the week ahead.if you would like a free trial to TradeTheNews.com live audio commentary, breaking news alerts and much more, visit us to get started.
Markets tilted even further back into risk-on sentiment this week on the prospects of more central bank stimulus and as many of the marquee names reported better than expected Q3 earnings. ECB President Draghi gave markets a boost by promising more stimulus at the December meeting on the heels of Germany reporting another month of PPI contraction. China’s central bank threw in another rate cut for good measure, further confirming market expectations that central banks will provide an even bigger stimulus cushion. A raft of housing data showed the US real estate market remains a bright spot. Despite some more turmoil in the biotech sector, the broader stock market continued to rebound as solid earnings reports came in and some key firms surprised to the upside. The major US indices exploded past their 200 day moving averages on Friday, and for the week, the DJIA gained 2.5%, the S&P rose 2.1%, and the Nasdaq surged 3%.Central Bank monetary policy came sharply back into focus this week. ECB President Draghi kicked things off with the bank’s latest policy statement. Draghi announced the council will formally re-examine the degree of accommodation necessary to offset growing downside risks to growth when they meet in December. He went on to reveal that, as part of a robust discussion, the monetary policy council talked about lowering the deposit rate as well as expanding QE, though no stimulus tool has yet emerged as the favorite. The shift in the ECB stance sent global equities and the Dollar Index on a run that was further propelled by the PBOC’s decision to cut both the deposit rate and the RRR on Friday, its 6th rate cut action this year. The PBoC cut was particularly meaningful ahead of the Chinese Communist Party Plenum next week which will set targets for the country’s next 5-year economic plan.The US Treasury curve steepened on the increased likelihood this week’s move gives even more cover to the US Fed should it choose to delay rate liftoff into 2016. Fed speak was notably absent due to the blackout period ahead of next week’s FOMC meeting.US housing data continued to show strength. The October NAHB housing market index beat expectation and hit its best level in nearly 10 years. Existing home sales for September came in at 5.55M, better than the 5.39M estimate amid continued tight supply. September housing starts were better than expected, though building permits missed estimates.

Oil prices declined more than 6% this week with WTI retreating back towards one month lows after looking poised to break out above the $50 earlier this month. The weekly API and DoE inventory surveys both reported another huge inventory build (+7.1 million and +8.0 million bbls, respectively), highlighting continued strong supply of crude in North America. The recent decline we have been seeing in the Baker Hughes rig count slowed dramatically this week as well.

North of the boarder, Canadians kicked off the week by voting the conservative party out of power for the first time in nearly a decade. Justin Trudeau and his Liberal Party won the national election in a landslide, obtaining an outright majority in the Parliament. The Canadian Dollar lost some ground following the news and leading into Wednesday’s BOC rate decision. As expected the BOC left rates unchanged, but also lowered their growth outlook for the remainder of this year, next year, and 2017. Gov Poloz attempted to keep things even-keeled at his press conference by highlighting the momentum build in the Canadian economy and indicating that it was withstanding the spillover effects of low oil prices. He also noted that at this point weakness in the Loonie has not been out of line with historical norms. By weeks end CAD appeared to have shrugged off the early week headlines and lower oil prices to resume an uptrend.

Third quarter earnings season kicked into high gear this week and there were some very notable bright spots. Dow components Dow Chemical, 3M, and McDonalds are all saw strong gains. McDonalds, in particular, delivered a standout report that included global sales comps growth that was more than twice the expected amount. Dow topped EPS estimates and sped up its share buybacks. 3M’s revenue missed expectations but eked out a 1.2% y/y gain, and the company launched a new restructuring effort. Tech behemoths Amazon, Microsoft, and Alphabet Inc (Google) opened up roughly 10% each on Friday post-results. Microsoft beat estimates on strength from its cloud and enterprise units. Alphabet disclosed strong aggregate paid click growth and Amazon surprised markets with a second quarter in a row of real profits and seemingly unstoppable growth in its North American cloud business.

On the other hand, American Express continued to disappoint. Shares languished after missing expectations and offering sub-par FY guidance. IBM revenue declined again and missed expectations and along with lowered guidance. Much loved Under Armor, Chipotle, and Skechers all got punished after quarterly results/guidance failed to live up to inflated expectations.

Ferrari successfully launched its IPO this week. Shares climbed as much as 17% on Wednesday after pricing the IPO $52, at the top end of the marketed range $48 to $52/share. The shares traded as high as $60.97. Coincidently on the same day General Motors offered up a strong earnings report led by a very robust North American auto market.

Despite the pretty broad based strength in stocks, the health care sector suffered another rough week. On Thursday hospital stocks got hammered after Community Health Systems cut guidance and shares crashed 35%. Several hospital and related staffing names traded down double digit percentage points on the day. Those declines came in the wake of the high drama around Valeant. On Wednesday the firm tied to the recent political concerns related to drug price gouging faced a new front when a short-selling blog claimed to have evidence that the company was potentially channel stuffing. VRX shares slid over 40% before the company and one of its high-profile investors came out and defended its business practices. Other firms tied to specialty pharmacy arrangements all came under pressure as traders shot first and asked questions later. Many were forced to put out releases clarifying that they did not use any of the types of specialty pharmacy distribution channels that raised eyebrows in the report on Valeant. Shares rebounded into week’s end after Valeant management announced a Monday morning conference call to address recent allegations.

M&A reached a frenzy in the semiconductor space. On Monday, Microsemi threw its hat into the ring to acquire PMC, offering a $2.4B cash-and-stock bid valued at $11.50, above Skyworks’ offer of $10.50/share. By Wednesday Western Digital confirmed previous press reports by announcing a deal to acquire flash memory giant SanDisk. It will pay $86.50/share almost entirely in cash, valuing Sandisk at around $19B. Western Digital will enter new debt facilities totaling $18.4 billion to fund the deal. Also on that day KLA Tencor agreed to be acquired by LAM Research in a $10.6B cash and stock deal.

GOOD TRADING

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

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Futures Trading Levels

Contract Dec. 2015 SP500 Nasdaq100 Dow Jones Mini Russell Dollar Index
Resistance 3 2078.50 4672.83 17675 1170.53 97.66
Resistance 2 2073.25 4651.42 17627 1166.87 97.46
Resistance 1 2068.00 4635.58 17581 1160.73 97.20
Pivot 2062.75 4614.17 17533 1157.07 96.99
Support 1 2057.50 4598.33 17487 1150.93 96.73
Support 2 2052.25 4576.92 17439 1147.27 96.53
Support 3 2047.00 4561.08 17393 1141.13 96.27
Contract Dec. Gold Dec. Silver Dec. Crude Oil Dec. Bonds Dec.   Euro
Resistance 3 1175.7 16.18 45.85 159 8/32 1.1150
Resistance 2 1172.6 16.08 45.40 158 24/32 1.1113
Resistance 1 1168.1 15.97 44.56 158 11/32 1.1085
Pivot 1165.0 15.87 44.11 157 27/32 1.1048
Support 1 1160.5 15.76 43.27 157 14/32 1.1020
Support 2 1157.4 15.66 42.82 156 30/32 1.0983
Support 3 1152.9 15.55 41.98 156 17/32 1.0955
Contract Dec. Corn Dec. Wheat Nov Beans Dec. SoyMeal Nov. Nat Gas
Resistance 3 395.3 535.0 897.58 311.13 2.38
Resistance 2 390.5 523.5 894.67 308.67 2.31
Resistance 1 387.5 516.3 889.83 305.43 2.19
Pivot 382.8 504.8 886.92 302.97 2.12
Support 1 379.8 497.5 882.1 299.7 2.0
Support 2 375.0 486.0 879.17 297.27 1.93
Support 3 372.0 478.8 874.33 294.03 1.82
Economic Reports

source:http://www.forexfactory.com/calendar.php

All times are Eastern time Zone (EST)

Date 3:51pm Currency Impact Detail Actual Forecast Previous Graph
TueOct 27  5:00am EUR M3 Money Supply y/y 5.0% 4.8%
EUR Private Loans y/y 1.1% 1.0%
8:30am USD Core Durable Goods Orders m/m 0.0% -0.2%
USD Durable Goods Orders m/m -1.1% -2.3%
9:00am USD S&P/CS Composite-20 HPI y/y 5.1% 5.0%
9:45am USD Flash Services PMI 55.3 55.1
10:00am USD CB Consumer Confidence 102.5 103.0
USD Richmond Manufacturing Index -3 -5

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.

 

 

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