New home construction unexpectedly climbed to a four-year high in October, driving U.S. equity futures to slightly positive territory. The DEC12 E-mini S&P 500 futures are continuing their rally from below 1350, and today they have hit a high of 1386 thus far. Housing starts rose 3.6% to a 894,000 annual rate, the fastest since July 2008. Our former pivot/support level of 1430 is now our key resistance level for this market. If the E-mini S&P rallies further, we think 1430 will be a congestion point. Fiscal cliff negotiations are still a key factor at play.
In commodities news, corn and soybeans are up today, both trading positive at just under +1%. JAN 13 soybeans have rallied up through the $14 level, which we believe will serve as a support level going forward. DEC12 corn futures have bounced off of a key support level at $7.10 and are now trading at around $7.45. We see a potential congestion/resistance area at $7.90. We wouldn’t be surprised to see corn rally to this level.
Crude oil has rallied from below $85 to $90 in just a few sessions, and is actually down more than 2% today, trading at approximately $87.34. This market still looks to be in a bearish environment, and our $82 target is still a distinct possibility. DEC12 natural gas futures continue their bullish run this morning, trading up more than 2% at $3.79. We believe this market has strong support at the $3.60 level, and that the next major upside target is $4.20. Market players are looking ahead to a closely watched U.S. government report on natural gas supplies on Wednesday.