Apple (NASDAQ:AAPL) plunged 5.9% after the price of its new lower-cost iPhone disappointed analysts. Economists estimate the Fed this month will taper its monthly bond buying by $10 billion, to $75 billion. European stocks were little changed near a three-month high.
Equities: The SEP13 E-mini S&P 500 (CME:ESU13) is pushing up against some major resistance levels this morning just below 1684. Technically, on the daily chart and on the 5-hour bar chart, this market is looking like it is in overbought conditions. We believe that 1684 will serve as formidable resistance before the next FOMC meeting, as investors might not want to make major moves before the next Fed meeting. Overall, the market does seem very strong, and does seem like it wants to approach all-time highs again, but we think the 1684 level might hold as a ceiling until the Fed meeting.
Bonds: The U.S. 30-year bonds (CBOT:ZBZ13) are up 1 tick today. We believe the bond market is very nervous about a QE tapering announcement this month, and are holding near their 2013 highs in yield today. We believe that the bonds look to be forming a short-term bottom here, and could advance in price before the mid-month Fed announcement. Overall, we still focus on the longer term downside target of 127, and we believe this target will be hit.
Commodities: OCT13 WTI crude oil (NYMEX:CLV13) is back up today in a trade that has been very volatile recently. This market is up $.46 to$107.85 today, keeping with what we believe is an overall uptrend. We believe the $105 level is the line in the sand. If this market can stay above $105, we believe it has potential to head to $115, not necessarily on a potential supply disruption with the Syria situation, but more so on the global growth phenomenon we are seeing across several regions. DEC13 gold futures (COMEX:GCZ13) are trading at unchanged levels from yesterday. We believe that this market will finish the year below $1,350, as an official tapering announcement will potentially not be friendly to gold prices. OCT13 sugar has gone up this week, and is holding strongly above the 17 cent level. OCT13 sugar futures are trading at 17.31 cents/lb today. We believe this market could still head higher over the short to medium term as a heavy bear market starts to potentially reverse.
Currencies: The SEP13 British pound is very strong today, up 79 ticks to 158.10. We believe that not only is this a key resistance level, but also the 160 level might be important as well. The pound has seemed very strong, and we would not be surprised to see it heading above 1.59. The SEP13 Swiss Franc is interesting, because it was very week just a few sessions ago, now it has rallied two of the past three days, and is now up 45 ticks to 107.43. 108.20 is our next key level of resistance. We do not believe the Franc will hold above 108.20.