U.S. Secretary of State John Kerry arrived in Geneva today for at least two days of talks with his Russian counterpart on a proposal for Syria to surrender its chemical weapons. A report today showed jobless claims in the U.S. declined last week to the lowest level since April 2006. Barrick Gold, the largest miner of the metal, slipped 4.2%.
Equities: The SEP13 E-mini S&P 500 (CME:ESU13) is down 3.25 points today to 1685.50. The 1684 barrier we have noted has been slightly breached this morning, but the market is still down today and we do believe the technical indicators we watch show the market is potentially at overbought levels in the short term. The next support level is 1680, and then 1667. We would not be surprised to see this market head below 1680 before next week’s Fed announcement.
Bonds: The SEP13 U.S. 30-year bonds (CBOT:ZBU13) are up 21 ticks to 130’01 this morning, hovering right above their key level of 130. We believe the bonds are starting to show signs of a short term bottom below 130, and we would not be surprised to see the bonds rally further to our next level of 131’16. However, we believe any large moves up or down will not occur before next week’s Fed meeting which could include an official tapering announcement. Overall, we still watch the 127 level as our next downside target.
Currencies: The SEP13 New Zealand dollar is strong today, on speculation that their central bank will actually start to increase rates next year. The SEP13 Aussie dollar rallied to 93.50 last night, but then dropped on some long-liquidation selling after a disappointing jobs number from Australia. The Aussie is down 61 ticks to 92.69. The SEP13 Swiss Franc is up 10 ticks to 107.61 today, and we have 108.20 as a potentially strong resistance level. If there is indeed a true peaceful and clear resolution in Syria without military strikes, we think the Swiss Franc is very vulnerable to a down move to fill its gap at around 104.50.
Commodities: DEC13 gold (COMEX:GCZ13) is down big today, trading to $1,330, or down $34. Gold has broken some key support levels recently, one at $1,390, and more recently at $1,336. Our next level to watch for support is $1,300. We believe gold could even approach that level within the next couple of weeks, especially if we see a tapering announcement next week. NOV13 soybeans are rallying again after today’s crop report, this time up to $13.85. The key resistance level for this contract is $14.10. OCT13 crude oil (NYMEX:CLV13) is up $1.31 to $108.86 on renewed concerns regarding a resolution in Syria. We have $110 as a very key resistance level, and if the market can get above here, we believe it could go much higher, possibly to $115.