As data today showed, the recession in the euro area deepened, and .U.S equity markets tumbled overnight, but then clawed back to unchanged levels this morning. The market’s strength can likely be attributed to not only recent news of a huge corporate transaction of Buffet and 3G Capital buying H.J. Heinz Co. for about $23 billion, but also to this morning’s jobless claims number, which was much lower than estimated.
Therefore, it seems as though investors sold equity futures to immediately respond to the disheartening economic numbers out of Europe last night, but then saw the U.S. data and the big Heinz deal, and started to buy again. Overall, we believe the 1515 level could be a type of magnet in the S&P 500 MAR13 futures in the very short term, until we see another big data point get released, such as next month’s non-farm payrolls. However, this market does seem like a bull market. So in bull markets, even when there is no news, or even bad news, the market tends to rise.
Many key commodities are down today. Sugar continues to slide beneath the key pivot level of $0.19. Now sugar is trading down 2.03% to $0.1786. The grain markets continue to tumble, with corn futures (MAR13) back below $7 today, and MAR13 soybeans down $0.09 to $14.13. Soybeans may slide lower in the near term, but if this market gets close to $13, we believe this would be a very key support area.
Precious metals such as gold and silver continue to be in bearish-neutral mode in our opinion. FEB13 gold futures are down $9 today, trading down to $1,635. Our next key downside target level is $1,625. If gold can break this level, we’ll look for $1,590.
We focus more on the incredible rally occurring in RBOB gasoline futures. There has indeed been a seasonal pattern where RBOB rallies from January to April. RBOB started its rally this year right at the beginning of January, and has not really looked back since. RBOB (MAR13) is up another 2% today to $3.0955, and our next key target is $3.20. Our major upside target/resistance level is $3.40.We very well could see the $3.20 level approached by April.
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