- U.S. stocks rose, sending the Standard & Poor’s 500 Index toward a record.
- Release of minutes of the latest Federal Reserve meeting.
- Housing starts fell to an 888,000 annualized rate following December’s revised 1.05 million.
Equities: The March E-mini S&P 500 is up 4.75 points to 1842.25, almost breaking its contract high set in December of 2013. We believe the market is strong, and could head higher though a temporary top may be approaching. The added crisis and conflict in Kiev could potentially cause investors to move towards more traditional “safe-haven” investments which could cause a short term reversal in equities. We would not be surprised to see the market head lower to 1815.
Bonds: March Treasury bonds are up 6 ticks to 133’16. We could see some buying in the bonds if the conflict in Ukraine escalates. The bonds could make a run for recent highs of the 135 level. We are still in the thick of major cold weather in various parts of the country, and if and when the economic data (housing and jobs) starts to pick up again, we could see bonds start to head lower again. But while waiting for this possibility to be real, we would not be surprised to see bond remain strong.
Currencies: The Canadian dollar is weak today, putting in a “bearish engulfing” candlestick formation on the daily chart. It is down 74 ticks to 90.58. Our next two key support levels are 90.30 and then 89.80. The euro is down 1 tick to 137.56, putting in a doji candlestick on the daily chart, which could potentially indicate that the euro may head lower back down to the 136.50 level, as the Euro has rallied from 135 to almost 138 this month.
Commodities: The big commodities stories today involve natural gas, coffee, and sugar. Front month natural gas is up 52¢ to $6.07. Our next upside market profile target is $6.18. There is a key storage report for natural gas tomorrow. We would not be surprised to see natural gas head lower tomorrow to perhaps the $5.80 support area after the report. Also, the violence and clashes in Kiev could also be responsible for this rally. May coffee is up almost 6% to $1.6380. Our next target is the $1.67 area. May sugar is up over 2% to 16.85¢, after trading below 15¢ just a month ago. April gold has calmed down after its big run up, trading down slightly to $1,319 today; $1300 could be key support for gold.