Trading Levels and Reports for October 5, 2012
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, 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 Friday October 6, 2012
Un -Employment report tomorrow morning.
Below is some excellent information from my colleagues at:
|WHAT IS IT?|
|US Employment report (September)|
|WHEN IS IT?|
|Friday 5th October 2012, 13:30 (BST)|
|Monthly change in employment excluding the farming sector. Nonfarm payrolls is an influential statistic and economic indicator released monthly by the US Bureau of Labor Statistics as part of a comprehensive report on the state of the labor market. Payroll jobs move with the economy and help define business cycles; the figure is therefore analysed to determine whether the economy is expanding or contracting.As the Federal Reserve is mandated to establish a monetary policy that ensures maximum employment, the Fed pays particular attention to this employment statistic. A surge in new nonfarm payrolls suggests rising employment and thus potential inflationary pressures, which the Fed often counters with rate increases. On the other hand, a consistent decline in nonfarm employment suggests a slowing economy, which makes a decrease in rates more likely.|
|Payrolls are expected to have gained 113k in September according to a Reuter’s survey, below the 139k average over the first 8-months of the year, but above the 96k reading seen in August.The unemployment rate is forecast to have risen in September to 8.2% from 8.1% as job gains fail to keep pace with the growth in the labour force. Fed Chairman Bernanke pledged this month to continue pumping money into the system until employment recovers.
Peter D’Antonio, an economist at Citigroup says “We’re looking for pretty sluggish payroll growth. This will be more of the same, what Bernanke called ‘worrisome.’ It may reflect weakness coming from abroad, weakness in manufacturing, and the hiring situation is not being helped by concerns over the fiscal cliff.
This month’s non-farm report marks the next-to-last employment figures before the November elections, in which economic issues play a key role, and of course none is greater to the US electorate than employment. Only one president, Ronald Reagan, has been re-elected since WW2 with a jobless rate above 6%. The unemployment rate has exceeded 8% since February 2009, the longest stretch in monthly records dating back to 1948.
Federal Reserve Bank of Chicago President Charles Evans has called for accommodation so long as unemployment exceeds 7% and inflation remains below 3%. On September 20th, Fed Bank of Minneapolis President Kocherlakota said the central bank should keep rates near zero until the jobless falls below 5.5% and inflation doesn’t exceed 2.25%.
Manufacturing has been a pillar of the early stages of the recovery, but has started waning in recent months. The ISM manufacturing reading for September saw a slight improvement from August, but was still only marginally above the 50 level at 51.5. It was the first month out of the last four that manufacturing expanded.
The employment component of ISM manufacturing was actually fairly robust at 54.7 in September from 51.6 August. Whether this will be reflected in the manufacturing payrolls however remains to be seen. German manufacturing giant Siemens AG recently announced some 615 job cuts at its US factories after a “significant drop in new orders,” according to a message to employees obtained by Bloomberg.
Manufacturing payrolls are forecast to come in flat in September from -15k in August according to a Reuter’s survey.
Analysts at TrimTabs investment research believe the no. of new positions estimated by the US BLS may be hugely understated. They believe the US economy probably added 210,000 jobs according to their research.
TrimTabs say the economy is gaining momentum, leading to job gains in interest sensitive sectors. “We believe artificially low interest rates are boosting demand for housing, mortgage refinancing, and cars,” it says.
Their employment forecast is based on the amount of daily income tax paid to the US Treasury from all salaried employees, according to the firm. They say this gives a more accurate real-time view of job trends than the government’s estimate.
TrimTabs say however, that they don’t believe the pick-up in jobs is sustainable long-term, in large part due to extra costs related to US health care reforms that are scheduled to take effect on January 1st.
The employment data we’ve seen in September has presented a very mixed picture. The employment components of ISM manufacturing, Philadelphia Fed and Consumer Confidence – Jobs plentiful have been better, whilst ADP, Chicago Fed and the Consumer Confidence – not so plentiful figures have been worse. Itis, therefore, quite difficult to predict what the direction of this month’s non-farm payrolls will be. The table below illustrates the mixed picture of the employment figures over the last month:
|TABLE OF US EMPLOYMENT FIGURES|
|Figure||Sep||Aug||Higher or Lower|
|Consumer confidence – Job’s plentiful||8.3||7.2||Higher|
|Consumer confidence – Not so plentiful||51.8||52.2||Lower|
|Philadelphia Fed – No. of employees||-7.3||-8.6||Higher|
|ISM Manufacturing Factory employment||54.7||51.6||Higher|
|MNI Chicago Fed – Employment||52||57.1||Lower|
|Empire Manufacturing – No. of employees||4.26||16.47||Lower|
|Challenger Job cuts||33.816k||32.2k||Higher|
|Initial Jobless claims – 4-week average||375.0k||374.0k||Higher|
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|
|Contract||Dec Gold||Dec. Silver||Nov. Crude Oil||Dec. Bonds||Dec. Euro|
|Resistance 3||1819.6||3576.7||96.52||150 3/32||1.3192|
|Resistance 2||1808.7||3546.8||94.14||149 27/32||1.3117|
|Resistance 1||1801.8||3525.2||92.67||149 16/32||1.3068|
|Support 1||1784.0||3473.7||88.82||148 29/32||1.2944|
|Support 2||1773.1||3443.8||86.44||148 21/32||1.2869|
|Support 3||1766.2||3422.2||84.97||148 10/32||1.2820|
|Contract||Dec. Corn||Dec. Wheat||Nov. Beans||Dec. SoyMeal||Dec. bean Oil|
Final GDP q/q
German Factory Orders m/m
Non-Farm Employment Change
Average Hourly Earnings m/m
FOMC Member Duke Speaks
Consumer Credit m/m
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