The Conference Board’s index of U.S. consumer confidence fell to 78.1 in February from 79.4 the prior month. Another report today showed home prices rose at a slower pace in the 12 months ended in December. The S&P 500 climbed to an all-time high of 1,858.71 yesterday before slipping back for a 0.6% gain, ending below its previous closing record on Jan. 15.
Equities: The March E-mini S&P(CME:ESH14) has recovered from early morning losses and is currently trading up 2.5 points to 1848.25. As we have been noting for a while, it still seems to be a bull market and we do not see any major signs of a big correction at this point. We believe the market may approach our next key target at 1873. Also, 1851 is an important resistance level. If the market can breach 1851 and not lose momentum, we could see more rallying and even a potential short-squeeze pushing the market above and beyond 1873. Again, 1851 is our key level.
Bonds: March 30-year bonds(CBOT:USH14) are up 25 ticks to 133’20. The bonds are rallying right alongside the S&P 500. We believe the overall deflation theme that has been discussed may be supporting equity AND bond prices. The bonds are above a key pivot level of 133. As of now, it looks like the bonds may be strong.
Currencies: The yen(CME:JYH14) is up 26 ticks to 97.83 and looks like it is in a recent uptrend, with key resistance at the 99 level. We do believe that the yen may actually rally, especially if it can stay above the key 97.50 level. The British pound(CME:BPH14) is up 35 ticks today to 166.97. The pound is above the key 1.66 level, and we still believe it may be headed to 1.70.
Commodities: April gold(COMEX:GCJ14) is up $4 to $1,342. Gold seems to have some serious underlying bullishness at this point, and we would not be surprised to see it head to $1,365. May coffee(NYBOT:KCK14) and sugar(NYBOT:SBK14) are strong again, with coffee up around 2% and sugar up just over 2% as well. $1.87 is our next target and resistance level for coffee. March oats(CBOT:OH14) have had an amazing rally recently, and today are up another 15¢ to $4.9875. Our previous target was $4.92 and the next one is $5.12.