Markets are fairly quiet today in pre-holiday trading. US equity futures are hovering around unchanged levels from yesterday’s close and US bond futures and Eurodollar futures are actually down slightly on the day thus far.
After a sharp rally from below the key 1350 level, DEC 12 E-mini S&P 500 futures have now slowed down and seem to be waiting for more confirmation that the fiscal cliff scenario can be averted through a deal. Geithner seemed very positive that a deal will occur, and we expect this to drive US equity futures higher. However these levels at the moment seem to be overbought. However, in the medium or longer term, with housing numbers continuing to be very strong, we will look for other economic data to confirm a recovery and then we think stock futures will trade higher and march back up towards 2012 highs. With that said, the real key at this point is how the fiscal cliff situation plays out.
In other commodities markets, heating oil is one of the strongest commodities on the board, trading up 1.3%. Natural Gas continues its bullish tone, trading up .3% today, and crude oil is bouncing around in the mid to high 80′s, after a strong rally from below 85. Crude is trading up .5 percent at just above $87. After trading below the super-support level of 150,coffee has had a bullish burst back above 150, and today is trading up .5% at 153.30. Sugar has had a similar bullish burst, but hit a brick wall at the 20$ level and is trading down over 1% today at 19.66. Sugar looks to be in a bearish environment to us right now, and we would not be surprised to see it trade lower from here.
The Japanese Yen is just getting crushed lately, and today is no different. The Yen is down again, trading down almost 1% at 1.2140. We would not be surprised to see the Yen approach the key level of 1.20, which it last hit in March of this year. 1.24 is our key resistance level we are paying attention to in this market.