Microsoft Inc. rallied 6.6% after Chief Executive Officer Steve Ballmer said he would retire within 12 months. Purchases of new U.S. homes plunged in July by the most in more than three years, while previous months were revised down.
Equities: The SEP13 E-mini S&P 500 (CME:ESU13) is up 2.5 points this morning to 1657.25. We believe this is not the sign of a rally to yearly highs, but more of a short covering bounce off of 1632, that might find a ceiling soon, potentially at our market profile target of 1664. At this juncture, we believe the 1660 area might be the top of a short term trading range in this market, and we would not be surprised to see this market head lower to about 1648, waiting until the upcoming monthly U.S. jobs report to provide clearer direction to investors regarding the data which the Fed closely watches to help them determine their tapering approach and timeline.
Bonds: The SEP13 30yr Bonds (CBOT:ZBU13) are up over 1 point to 131’24. We have a support level at 131’05 and an upside resistance level at 132’24. We would not be surprised to see the bonds try to make a run towards that level, especially considering this morning’s sluggish new home sales data. The next key data point for the bonds is likely to be the monthly US jobs report, which could actually cause a large bond market rally if it comes in way below expectations. International tensions focused on the Syria situation could also be stoking a safe haven bid for the bonds.
Currencies: The SEP13 USD (NYBOT:DXU13) futures are down 12.5 ticks today to 81.405, which is likely due to the lower-than-estimated new home sales figure. It seems that the USD is having a very hard time putting together a rally. We believe that the SEP13 Euro currency may head back up above 1.34 and head higher from there. We have a key pivot level of 133.90, which is just about where this market is trading, and a key upside target of 135.25. The recent economic data out of Germany and the Euro region has been upbeat. The SEP13 Aussie dollar is up on the day, but very quiet. It is up 30 ticks to 90.16. We have been noting the 90 level as a key support, and we would not be surprised to see a rally in the Aussie, especially if we continue to see upbeat China economic data.
Commodities: NOV13 soybeans up $.36 today on fears of extended dryness due to excessive heat in key growing regions. The pro-farmer report showed that pod counts in many growing regions were higher than 2012, but the market jumped higher today before the weekend, on weather-related fears. We have key resistance in the mid $13.30′s for this contract, and if the key soybean growing regions do not get favorable rain soon, we could see this market approach $13.60. However, we are also watching $12.65 on the downside if indeed the rains come through and the market starts to unload the recent buildup of longs. DEC13 gold (COMEX:GCZ13) is up $25 today, perhaps on the back of a weak housing report this morning. We have $1,420 as a very key resistance level, then $1,480 as an important resistance level. We would not be surprised to see gold head above $1,400, but might be stopped around $1,420.