Trading Levels and Reports for October 25, 2012 - Cannon Trading

Trading Levels and Reports for October 25, 2012

Jump to a section in this post:

1. Market Commentary
2. Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Economic Reports for Thursday October 25, 2012

 

Hello Traders,

 FOMC is behind us until Dec. 11-12 which is the next meeting. News summary below:

 

WASHINGTON (MarketWatch)  The Federal Reserve on Wednesday continued to express concern about the economy as it made no changes to its ultra-easy policy stance. In its statement, the Fed said that growth had been moderate. While consumer spending had picked up, business spending had slowed. The Fed also said that inflation had picked up somewhat, due to higher energy prices.Read full FOMC statement. The Fed decision maintains its third-round of asset purchases, known as quantitative easing or QE3, unveiled in September, that consists of $40 billion of mortgage-backed securities. The Fed is also buying $45 billion of Treasurys offset by sales of shorter-term securities under its Operation Twist program launched in September 2011. The Fed believes these purchases put downward pressure on longer-term interest rates and ease financial conditions to support growth. Stocks rallied in the wake of the Sept. 13 Fed move, with the Dow industrials surging 206 points, or 1.6% that day. But from the Sept. 12 close through Tuesdays finish, the Dow had retreated 230.83 points, or 1.7%. In its statement, the Fed did not change the open-ended nature of the MBS purchases, repeating that they would continue until the labor market outlook improved substantially.  The Labor Department reported earlier this month that the unemployment rate dropped to 7.8% in October, the lowest rate since 2009. But the Fed indicated that is not enough. In its statement, the Fed said that growth in employment has been slow and the unemployment rate remains elevated. The Fed also repeated that it expects to keep short-term interest rates unchanged until mid-2015. The Fed kept its key new language, adopted in September, to hold rates near zero even after the recovery strengthens.  On balance, the economy appears to be stuck in a slow gear. Economists surveyed by MarketWatch estimate the U.S. expanded at a 1.6% clip in the third quarter, somewhat faster than the 1.3% pace in the prior three-month period, but still not strong enough to generate a large amount of new jobs.  The initial estimate of growth in the July-September quarter will be released Friday.  The vote of the Feds interest-rate setting committee on Wednesday was 11 to 1. A rotating set of 12 of the 19 Fed officials vote on rate policy. The dissenter was Richmond Fed President Jeffrey Lacker, who has dissented at every meeting this year. Lacker said he disagreed with the asset purchases and the mid-2015 calendar date for the first rate hike. Economists had expected a vanilla statement after the big changes in September and with the presidential elections less than two weeks away. Behind closed doors Behind closed doors, two issues likely dominated the discussion, economists said. The first is what the Fed will do when it Twist program expires at the end of the year.  Several Fed officials have spoken in favor of the new bond-buying to hold purchases at the $85 billion monthly rate when Operation Twist ends. Many economists think the Fed will announce such a program on December 12 after its next two-day meeting. But others said the Fed will take its cues from whether, or how, Congress and the White House address the fiscal cliff, the combination of tax hikes and spending cuts now scheduled to hit the economy at the start of the year. The second question is whether the Fed will rework its forward guidance to adopt numerical targets for inflation and unemployment and abandon its calendar date. This would work something along the lines of a plan advocated by Charles Evans, the president of the Chicago Fed, who wants the Fed to tell the market that it would keep interest rates near zero, as long as unemployment remains above 7%, and as long as inflation does not threaten to rise above 3%. The first step towards numerical targets will be a consensus forecast of the 12 voters on the Feds interest-rate setting panel. At the moment, the Fed provides a summary of individual policymakers forecasts. The Feds policy statement did not discuss refining the guidance. Fed watchers will be watching speeches by the top Fed officials and waiting to the minutes of the meeting to get a sense on how close the Fed is to changing the language and adopting a consensus forecast. The minutes will be released on November 15. This is one of those meetings where the minutes will be more interesting than the policy statement, said Lou Crandall, chief economist at Wrightson ICAP.  After the December meeting, the Fed will also release updated forecasts and Federal Reserve Chairman Ben Bernanke will hold a press conference. Analysts view the meeting with press conferences to be more likely to contain policyshifts, so that the chairman can elaborate on the reasons behind the moves. (TS:DJIA;)

As far as trading, what I wrote yesterday, still holds true today: 1391 is a major support level and how the market will react if we visit this level soon, will provide futures clues. This time I am sharing the daily chart for your review below:
 mini sp daily

 

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.

 

Contract Dec. 2012  SP500 (big & Mini) Nasdaq100 (big & Mini) Dow Jones (big & Mini) Mini Russell Dollar Index
Resistance 3 1424.40 2704.00 13150 827.17 496.80
Resistance 2 1419.50 2691.50 13119 822.83 490.70
Resistance 1 1411.50 2671.00 13067 817.27 486.30
Pivot 1406.60 2658.50 13036 812.93 480.20
Support 1 1398.60 2638.00 12984 807.37 475.80
Support 2 1393.70 2625.50 12953 803.03 469.70
Support 3 1385.70 2605.00 12901 797.47 465.30
Contract Dec Gold Dec. Silver Dec. Crude Oil Dec. Bonds Dec. Euro
Resistance 3 1728.7 3255.2 89.68 148  5/32 1.3085
Resistance 2 1722.0 3230.3 88.57 147 31/32 1.3044
Resistance 1 1712.2 3203.2 87.15 147 19/32 1.3008
Pivot 1705.5 3178.3 86.04 147 13/32 1.2967
Support 1 1695.7 3151.2 84.62 147  1/32 1.2931
Support 2 1689.0 3126.3 83.51 146 27/32 1.2890
Support 3 1679.2 3099.2 82.09 146 15/32 1.2854
Contract Dec. Corn Dec. Wheat Nov. Beans Dec. SoyMeal Dec. bean Oil
Resistance 3 772.4 896.7 1585.00 496.80 52.37
Resistance 2 767.8 893.3 1579.50 490.70 52.13
Resistance 1 761.2 888.7 1575.00 486.30 51.99
Pivot 756.6 885.3 1569.50 480.20 51.75
Support 1 749.9 880.7 1565.0 475.8 51.6
Support 2 745.3 877.3 1559.50 469.70 51.37
Support 3 738.7 872.7 1555.00 465.30 51.23

 

5. Economic Reports

All times are Eastern time Zone (EST)

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

Date 3:56pm Currency Impact Detail Actual Forecast Previous Graph
Thu

Oct 25
 4:00am EUR
M3 Money Supply y/y
3.0% 2.9%
4:00am EUR
Private Loans y/y
-0.4% -0.6%
Tentative EUR
Italian Retail Sales m/m
0.3% -0.2%
8:30am USD
Core Durable Goods Orders m/m
0.8% -1.6%
8:30am USD
Unemployment Claims
371K 388K
8:30am USD
Durable Goods Orders m/m
7.1% -13.2%
10:00am USD
Pending Home Sales m/m
2.3% -2.6%
10:30am USD
Natural Gas Storage
66B 51B

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

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