We see fear in the stock market’s eyes. We see investors sucker-punched by a steep and rapid sell-off following the Obama election. It just goes to show you to keep a cool head when investing and trading the markets, and don’t get too attached to the mass media hype of whatever is being yelled on the television financial shows that day. Do your own research, know your stops and know your options. That makes for a better informed and more empowered investing and trading experience.
The U.S. E-mini S&P 500 futures continue to slide, hitting new monthly lows this morning at 1342 (DEC12). Budget deficit negotiations still continue to concern investors, as well as disappointing blue chip earnings announcements. For example, Dell is down almost 7% today after announcing less than stellar earnings. This is exactly why we encourage investors to know their options outside of the traditional stock and bond markets.
In commodities news, we see the soybeans and soybean meal down almost 2% as news was released that China may have cancelled 600,000 tonnes of previous purchases from the U.S. due to poor crush margins have sent futures to new lows for the move. Corn is down around 1% as weekly export sales for corn are expected to come in at 8-10 million bushels. Corn seems to be being led down by soybeans with the fundamental news from China rocking the markets this morning.
Silver futures are down fairly big at 1.5% today as the risk off tone spreads to the precious metals markets. The rally in the dollar is also a key factor in the precious metals decline. The only major commodities that we see rallying today are crude oil, natural gas and orange juice futures.
We focus our analysis on the Euro currency futures. Since trying to break through 131.50 in October, the Euro has been in a downtrend since then. We see a “lower-highs” pattern developing, with a resistance line at 128.50. Furthermore, this month, the Euro futures have broken their uptrend support line, and we are looking for a potential further down move to a key level at 126.00. The U.S. Dollar Index seems very strong right now, so if the U.S. dollar keeps rallying, the Euro could touch and extend lower past the first level of 126.00.