Follow the money

  • The Nasdaq 100 Index rose, after its worst three-day drop since 2011. Technology companies from EBay Inc. to Google Inc. and Facebook Inc. jumped more than 1.7 percent. 
  • The S&P 500 lost 1.1 percent yesterday, sending its three-day drop to 2.4 percent, the most since January. 
  • Current Russia-Ukraine events bear “the hallmarks of a Russian strategy to destabilize Ukraine,” U.K. Foreign Secretary William Hague told Parliament in London.

Equities: The E-mini S&P 500 (CME:ESM14) is up 3 points to 1841 this morning. Overall, the market still looks like its in a bearish technical environment, with it being well below one of our key areas around 1865. We would not be surprised to see the market try to test the waters below 1800 sometime soon. Again, as long as the market is below our key level at 1865, we believe its in a bearish environment.

Bonds: The bonds are down 4 ticks to 133’10. It looks like the bonds are in a quiet range since the beginning of 2014. On one hand, we believe the reasons for the bonds to slide have to do with the Fed taperingand higher interest rate discussion. On the other hand, we have  a potential reason to rally focused on the potential further decline of the stock market, as well as the uncertainty surrounding Russia and Ukraine. Thus, it looks like the bonds are in a tug of war so to speak.

Currencies: This was the key sector with big movement in overnight trading. The British Pound (CME:B6M14) spiked higher to 167.37 on positive UK economic data. We believe the Pound is headed to 1.70. The Aussie is also up a good amount this morning; it is higher by 72 ticks to 92.98. It has rallied a lot this year, we believe it could be approaching overbought levels in the short term. The Yen is up 91 ticks to 97.92. We believe the Yen has potential to test the 100 level, and possibly even rally above that level.

 


Commodities: Coffee (NYBOT:KCK14) approached the $2 level in morning trade, and is now almost unchanged from yesterday’s close at $1.9425. MAY14 WTI crude oil is up $.69 to $101.13. The next key potential market mover for oil is tomorrow’s weekly report on Crude Oil supply. We believe crude oil may head lower from here. Corn has been in a strong uptrend, and today is up $.03 to $5.02. We believe $5 may be a magnet for corn, but also believe the $5.50 level may serve as a cap on corn prices. Gold (COMEX:GCK14) is up $10 to $1,308. Next $1,280, then $1,265 are very key support levels in our view, and $1,320 is a key resistance level.

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