Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
Jump to a section in this post:
1. Market Commentary
2. Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000
3. Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Support and Resistance Levels – March Corn, March Wheat, Jan Beans, March Silver
5.Economic Report for April 2, 2012
Wishing all of you a great trading month in April.
May your trading have PATIENCE and DISCIPLINE!!
Market Week Wrap-up provided by www.TradeTheNews.com
– The final week of trading in the first quarter was subdued, as analysts celebrated just how well the stock market performance has been over the last three months. European stocks were had their best quarter since 2009, up 7%, while Japan’s Nikkei index rose nearly 20% in the quarter, for its best performance in 24 years. MSCI’s benchmark emerging equity index was up 13.7% on the year. In the US, the S&P500 rose 12%, for its best quarterly performance since Q3 2009, while the DJIA had its best Q1 since 1998. After the big run up in the quarter, investors continue to wonder how sustainable the rally really is and where the fuel for more upside will come from. Market mavens are still betting the Fed will cart out QE3 in the months ahead and in comments this week Chairman Bernanke affirmed accommodative policy must continue. He noted that though the data is getting more encouraging the recovery is not yet self sustaining, and that policy options remain on the table if things get worse. Final Q4 US GDP met most expectations at +3.0%, however there were some worrying signs in durables and other manufacturing numbers. Three regional Federal Reserve banks published much weaker than expected March manufacturing activity indices: data from the Dallas, Kansas City and Richmond Fed were notably weak, with poor showings in the new orders subcomponents. In addition, the March Chicago PMI survey was also soft. The February headline durable goods orders number was weaker than expected at +2.2%, hardly making up for January’s -3.6% figure. In Europe, German officials finally gave in to pressure and agreed to a stronger EFSF/ESM firewall fund, amounting to a grand total of €800B, just in time for heightened tensions in Spain, where the government insisted that it did not need to consider a bailout for its banking system or request access to emergency funds. In energy markets, crude prices fell as western power continued consultations on releasing strategic reserves should the Iran situation worsen. WTI crude, which nearly hit $109 last week, was down to $103 by Friday. Equity weakness in China helped lower prices for industrial metals somewhat, although copper prices still closed out Q1 up 11%. The DJIA, S&P500 and the Nasdaq all rose approximately 1% on the week.
– Troubled firms Best Buy and Research In Motion announced big changes with earnings reports this week. Best Buy missed revenue expectations and top-line sales were lower on a y/y basis in its Q4. Comps were negative, and the firm’s FY13 guidance leaves a lot to be desired. In addition, Best Buy said it would close 50 US stores and eliminate jobs in a new restructuring effort, with a renewed focus on smaller stores. Shares of Research in Motion dived after the close on Thursday and then recovered again after the company said it would not offer official guidance and also disclosed that it was reviewing “strategic opportunities” and other ways to leverage its assets. The firm warned that its revenue would be down on a sequential basis in Q1, and offered other negative qualitative comments on FY12. Several senior executives are leaving the firm, including CTO David Yach, and former Co-CEO Jim Balsillie is resigning from the board.
– In other earnings, Walgreen’s numbers were broadly in line with expectations, thanks to solid y/y growth. However, the firm’s overall comps were negative. Apollo Group beat consensus expectations in its Q2 and reiterated its strong FY12 outlook. However, enrollment trends continue to head in the wrong direction and investors are still negative on the stock. Homebuilder Lennar is widely beat consensus estimates in its Q1 and saw big gains in new orders y/y and a much higher backlog of homes.
– In tech news, Apple CEO Tim Cook paid a high-profile visit to China just as Apple’s main manufacturing partner Foxconn announced that it would reduce average working hours and improve working conditions. Google announced that it would set up an online sales outlet to sell tablet computers from various manufacturers running Android, some or all of which would be branded with the Google name. The plans were chewed up by the media, with most analysts wondering how the firm could position itself vis-a-vis low-cost rival Amazon and high-end powerhouse Apple, with many references to its failed attempt to sell the Nexus One smartphone online. Press reports stated that Yahoo’s new CEO is said to be planning major layoffs and is considering renegotiating its search deal with Microsoft in favor of Google as he struggles to right the ailing firm.
– In M&A news, Pentair said it would merger with Tyco’s flow control business in a $10B combination, valuing the unit at $4.9B. Roche sweetened its deal for gene sequencing specialist Illumina, increasing its long-spurned cash offer by 15% to $51/share from $44.50/share prior. Roche continues to face opposition from Illumina’s second-largest shareholder, Baillie Gifford, which owns over 11% of the company. Shares of Amylin surged after reports that the firm had rejected a $3.5B merger bid from Bristol-Myers Squibb last month. The offer was said to be around $22/share. Liz Claiborne shares shot higher on Friday on a report that it had received an approach from private equity firms, though management stated that they are not contemplating a sale.
– The euro was recovering from its mid-month soft patch coming into the week, and EUR/USD was pretty much contained within a 1.3250 to 1.3400 range. Dealers were perplexed by the euro’s steady tone given the overwhelming problems facing the continent. Euro zone officials signed off on a bigger €800B firewall even as the peripheral situation remained at a slow boil in the background. Moody’s further downgraded seven Portuguese banks, Spain warned that its Q1 GDP would be just as bad as the Q4 number (-0.3%), and S&P warned that Greece may need another debt restructuring plan. Better German IFO data helped buoy EUR/USD but the data was offset by commentary from the IFO economist that the German economy was losing some of its momentum. In addition, there were reports that Chinese President Hu Jintao was telling authorities and the business community to invest in Italy, raising hopes for more outside support for the euro zone.
– GBP/USD hit fresh four-and-a-half year highs as it tested above the 1.60 handle, aided by flows from the EUR/GBP cross. GBP/USD briefly tested above its 200-week average of 1.6011. The last time the pair was above that key moving average was back in August 2008, when the pair found itself above the 1.90 handle.
– USD/JPY continued to consolidate the gains seen over the last two months. Dealers again stressed that the US yields needed to continue to move higher before the pair could break above the ¥84 handle, as this week’s retracement saw USD fall toward the ¥82 handle several times. The overall risk-averse environment early in the week as well as Japanese FY-end repatriation flows further aided the yen, as did the multi-month highs in Japan’s retail trade and household spending data points. Comments from BoJ chief Shirakawa foreshadowing more policy easing as well as the political battle waged by PM Noda to move on the consumption tax hike helped contain the yen strength late in the week, keeping USD/JPY just below ¥83 handle into the weekend.
– The Shanghai Composite accelerated its retreat with a 3.7% slide, a fourth consecutive week of decline. The most pronounced weakness was early in the week, attributed to the first decline in China’s industrial profits since 2009, as market focus now shifts to February manufacturing PMI on tap for release this weekend. Consensus points to a deterioration tracking surprising contraction seen in the flash HSBC report last week.
|Contract (June 2012)||SP500
(big & Mini)
(big & Mini)
(big & Mini)
|Contract||June Gold||June Euro||May Crude Oil||June Bonds|
|Resistance 3||1686.2||1.3464||105.30||140 16/32|
|Resistance 2||1679.4||1.3424||104.72||139 26/32|
|Resistance 1||1674.7||1.3384||103.93||138 25/32|
|Support 1||1663.2||1.3304||102.56||137 2/32|
|Support 2||1656.4||1.3264||101.98||136 12/32|
|Support 3||1651.7||1.3224||101.19||135 11/32|
|Contract||May Corn||May Wheat||May Beans||May Silver|
5. Economic Reports
Italian Monthly Unemployment Rate
Italian Quarterly Unemployment Rate
ISM Manufacturing PMI
Construction Spending m/m
ISM Manufacturing Prices
FOMC Member Pianalto Speaks