Last week the September e-mini S&P 500 opened at 1314.50 and closed the week at 1341.00. Friday a doji candle showed uncertainty in the markets. Over the next few weeks there will be a large number of earnings released, many with positive expectations. We have seen a good start to the Q2 earnings season as 85% of the 100 companies in the S&P 500 that released earnings results since July 11 have beaten estimates.
Looking at the daily chart, you can see that currently this contract is in a weak trend with ADX under 25 at 22.95 and pointing down. MACD is over the signal line with little divergence and Stochastics are entering overbought territory. The weekly chart shows a weak trend with ADX at 16 and a weekly range between 1250-1350.
Is volume an issue? Daily volume on NYSE is down 22% so far in July as compared with July last year. If this continues, July will have the lowest average daily trading volume since December 2007. I think we all know what happened not to long after. With weak job growth, a manufacturing slump, and serious debt problems here in the United States and Europe traders have reason to be worried.
Proceed to Page 2 for the latest COT Data...
COT Data
In the COT we see Commercials now net-long 85,871 contracts and Large Specs net-short -44,510 contracts. And view the actual raw data below from the COT regarding what group makes up 70% of Open Interest in the e-mini S&P. I hope you are not surprised.
Click on image to enlarge...
|
Commodity |
12-mo low |
12-mo hi |
22-Jul |
15-Jul |
|
Cattle (feed) |
-1,290 |
7,100 |
2,451 |
2,915 |
|
Cattle (live) |
-73,179 |
10,437 |
-10,621 |
-5,712 |
|
Hogs |
-35,979 |
21,270 |
-8,140 |
-3,182 |
|
Corn |
-413,915 |
-38,391 |
-244,920 |
-221,479 |
|
Oats |
-7,738 |
-2,538 |
-3,693 |
-3,314 |
|
Soybeans |
-203,260 |
-47,513 |
-117,491 |
-69,619 |
|
Soybean meal |
-90,487 |
-12,672 |
-39,885 |
-19,331 |
|
Soybean oil |
-117,444 |
-9,892 |
-41,905 |
-29,979 |
|
Wheat |
-32,577 |
55,729 |
48,476 |
52,730 |
|
Orange juice |
-20,878 |
-6,588 |
-20,878 |
-20,670 |
|
Coffee |
-47,729 |
-8,333 |
-10,251 |
-12,352 |
|
Cocoa |
-41,808 |
8,586 |
-23,455 |
-23,290 |
|
Sugar |
-221,694 |
-104,595 |
-184,127 |
-182,444 |
|
Cotton |
-69,857 |
-19,593 |
-31,975 |
-28,125 |
|
British pound |
-66,435 |
35,737 |
11,963 |
35,737 |
|
Canada dollar |
-115,190 |
-13,109 |
-56,684 |
-46,621 |
|
Euro FX |
-124,855 |
50,392 |
-6,486 |
-15,702 |
|
Japanese yen |
-52,464 |
76,983 |
-46,962 |
-27,879 |
|
Swiss franc |
-42,387 |
-13,390 |
-24,831 |
-21,944 |
|
US dollar index |
-20,849 |
14,003 |
-13,160 |
-13,166 |
|
Mexican Peso |
-140,414 |
-14,488 |
-95,092 |
-104,826 |
|
Australian dollar |
-110,025 |
-41,514 |
-96,561 |
-85,990 |
|
S&P 500 |
-88,893 |
23,124 |
-38,329 |
-30,859 |
|
T-note -10 yr |
-74,761 |
229,611 |
68,116 |
86,353 |
|
T-bond -30 yr |
-43,324 |
88,803 |
50,029 |
86,206 |
|
Eurodollar |
-1,179,414 |
81,781 |
8,329 |
-37,214 |
|
Crude oil |
-319,669 |
-25,439 |
-185,103 |
-171,813 |
|
Heating oil |
-66,097 |
7,568 |
-45,174 |
-40,748 |
|
RBOB Gasoline |
-85,987 |
-10,453 |
-77,336 |
-72,976 |
|
Natural gas |
108,160 |
228,910 |
137,173 |
154,126 |
|
Copper |
-36,201 |
-2,547 |
-27,815 |
-25,564 |
|
Gold |
-302,740 |
-193,197 |
-263,814 |
-244,249 |
|
Platinum |
-34,909 |
-17,979 |
-22,239 |
-18,827 |
|
Silver |
-65,413 |
-29,166 |
-39,513 |
-37,490 |
Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.
Proceed to Page 3 for this week's detailed fundementals charts...
Fundamentals
Fundamental outlook — Bull market correction — Stock prices shook off weakness early in the week and strengthened on:
- Optimism that Congress will enact a deficit-reduction plan and raise the U.S. debt limit
- Reduced concerns from the European debt crisis
- Strong Q2 earnings results
The longer-term outlook for stocks remains bullish because the Fed will keep its monetary generosity in place as long as necessary to produce a sustainable recovery with strong earnings growth. Stock valuation levels are reasonable with the S&P 500 trading at a low forward P/E of 13.5 (vs. the 5-year average of 14.9 and 10-year average of 16.7).
Have a prosperous trading week.
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