With U.S. housing starts jumping to four-year highs this morning, the S&P 500 futures found another reason to rally, up around six points as of this writing. U.S. bonds are continuing their recent slide, with the U.S. 30 year bond futures down almost 1%. Our downside target is 142 for the US treasury bond futures. We think this level might be reached quickly if the U.S. stock market keeps up its bullish tone, and if U.S. economic numbers continue to provide reasons for a stock rally. We also briefly focus on copper futures this morning: Copper is trading up today at $3.75. We note that 2012 resistance is at the $4 dollar price level. With China’s economy perhaps not as bad as everyone thinks, and with U.S. industrial production numbers beating expectations, we note that Copper potentially could trade up at least another 25 cents to the key $4 level into 2013.
Our main focus today is our S&P 500 futures target price. According to our analysis on the chart below, we note that the S&P 500 futures showed a 75 point rally from its September swing low of 1390. From that point, the market rallied to its recent high around 1465. Now, from its most recent swing low of around 1420, another 75 point rally would bring the S&P 500 futures target price to 1495. This is our target level, and we would not be surprised to see this level be hit before 2013. Another solid support base for this market looks to be at 1390. This market loves good housing numbers, and that is what we are getting recently. We see many ingredients in place for a rally to 1500.
Click to enlarge.