Markets debate value of good news ahead of jobs

(CME:ESZ13) - Today's Macro Theme Is "Good News Is Bad News" — Watch Today's Number For Direction: Equities played a game of Pac-Man yesterday and although making it tough to hold a position, the levels continue to work. First the S&P traded to a new low of 1784.50, but the 20-day moving average roughly held as the market then changed direction. The S&P then reached a new high compared to the day before at 1799.50 and above resistance but against the psychological 1800 level. After shaking out weak longs and then weak shorts that remained in, the S&P headed lower once again reaching 1777.75. The hold here was tremendous for the bull market keeping 1774.50-76 support intact. The much better than expected ADP report helped press the market lower and the mixed data to follow likely provided some support. However, the late failure and pull back can be somewhat of a mystery. However, we are crediting hesitance to buy above 1800 ahead of today and Friday's Nonfarm but most importantly positive rumors as to a budget deal in Washington. With a soft deadline in Washington right ahead of the December FOMC meeting, if we see better than expected US GDP and Nonfarm coupled with an early deal in Washington this could give Bernanke the fire power for a December taper. We have a much tighter range coming into today, the 20-day moving average comes in at 1787; a close below here will signal weaker positive momentum. However, yesterday's low confirms that 1774.50-76 will remain a line and the sand and only a close below this level will signal a further correction. Continue to play the levels.

Resistance - 1793.75**, 1800-01**, 1810-12.50***, 1825***

Support - 1787**, 1774.50-76*** 1766*, 1757***

(NYMEX:CLF14) - Draws In Crude Go To Refined Products: Crude inventories showed a draw of more than five million barrels, confirming the first in ten weeks. Although not as big as API was anticipating this has encourage a consolidation higher. To accompany the draw was a build in both Distillates and Gasoline which show a shift in bringing Crude to the refiners to meet demand. The high this session of 97.72 remains in check against major resistance at 97.72-97.90. Although a close above here will put Crude on a path to 100 there are still two three star resistance levels between here and 100. Support comes in today at 96.92 and although there is much support below here, traders will be watching for a close below this level to signal that the market may have gotten ahead of itself too much too quick. Only a new low compared to yesterday's 96.30 and furthermore below 96.15 will signal a failure and likely consolidation back towards the 20 day moving average at 94.55 and major support at 94.70.

 Resistance - 97.72-97.90**, 98.92***, 99.86-99.90***

Support - 96.92**, 96.30-96.15***, 95.57-.63**, 94.45-94.70***

About the Author
Rich Ilczyszyn

Rich Ilczyszyn is Founder and Chief Market Strategist of Rich excels at creating dynamic trading strategies for clients that establish solid positions, while remaining flexible enough to capitalize on market opportunities when they arise. By identifying market trends, breakouts, and failures in a timely fashion, Rich presents clients with the opportunity to realize their objectives while effectively managing their risk.

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