Facebook Inc. rallied 25% after second-quarter revenue and profit that beat analysts’ estimates. Orders for U.S. durable goods rose more than forecast in June, but Jobless claims rose by 7,000 to 343,000 in the week ended July 20.
Equities: It looks like 1682 might be the key decision level for the short term in the SEP13 E-mini S&P 500 (CME:ESU13). This market dipped all the way down to 1671.75, and is now trading down 7 points to 1676.75. The market profile indicates the next downside target at 1667. We believe this may be hit as the market be start to trade in a neutral to bearish tone. The market tried multiple times to break through 1695, and was not successful. Now, we believe the longs may be interested in exiting some of their positions before the next payrolls and unemployment data gets released soon. If the jobs # is a big upside surprise, we may see the stock market go down as the market will potentially start to be convinced of a late 2013 stimulus reduction.
Bonds: The SEP13 US 30-year (CBOT:ZBU13) bond futures are down 12 ticks to 133’23. This market is very close to breaking our key support level at 133’16. We believe the bond market investors are leaning toward a more hawkish Fed than Bernanke implied at his most recent speech. Everyone will be closely watching the upcoming employment data. We believe the bond market may be just taking a breather in the midst of a potential longer term move lower in price. Our next major target to the downside is 129.
Currencies: The SEP13 U.S. Dollar Index (NYBOT:DXU13) continues its bearish action, trading down 30 ticks to to 82.10 this morning, while the SEp13 Yen is strong vs the USD, trading up 63 ticks to 100.46. The Yen is a very interesting market at this point, because even with the news of Abe’s party winning a recent election, the Yen futures have not been able to hold below 100. We believe that the Yen/USD might be in store for a big short covering rally, at least to 103, possibly to 106. The SEP13 Aussie dollar futures have also reversed course this morning, trading up 29 ticks to 91.51. 90 seems to be a powerful barrier for the Aussie. And in an interesting fashion, the Euro is up 34 ticks today to 132.31, even with the news that private sector lending in Europe has not really seen an upturn yet. However, the Ifo institute’s business climate index, based on a survey of 7,000 German executives, rose to 106.2 this month from 105.9. We believe our most interesting currency thought at this point is a potential Yen/USD rally.