The market is digesting disappointing sales from Google Inc. (GOOG) and International Business Machines Corp.
- IBM dropped 3.4 percent to $189.82.
- Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market continues to strengthen.
- SanDisk Corp. jumped 9.9 percent to $83.32 for the biggest rally in the S&P 500.
Equities: The E-mini S&P 500 (CME:ESM14) is up 3.5 points to 1856.25, finishing the week on a positive note. 1867 is still our super-barrier this market needs to be able to trade above steadily in order for us to really believe it is going higher. Overall, even with the tapering, and even with the Ukraine uncertainty, it still looks like the market is bullish and any time it makes a significant dip, buyers have been excited to buy. Again, we really focus on 1867 as a key line in the sand.
Bonds: The 30-year bonds are down over 1 point to 133’27, failing to overcome our key resistance level of 135. We believe bonds, even though they have been in an uptrend this year, may approach the 132 level now that they have failed at 135. If the S&P 500 keeps going up due to a strong economy, the bonds could indeed head lower. We are aware we have been writing the bonds look like they have an underlying “bid” feel to them perhaps due to the safe haven effect of Ukraine, but if this dissapates, we could see bonds head lower.
Currencies: The Euro tested this morning above 138.50, but sellers quickly emerged and brought the Euro lower. The Euro is down 4 ticks today to 138.15. We would not at all be surprised to see the Euro try to break below 1.37. The Pound is down 2 ticks to 167.89 after hitting a key level of 168.30. The Yen (CME:J6M14) is down 13 ticks to 97.69. At this point, we could see the U.S. DOllar Index (NYBOT:DXH14) try to make a move back above 80.
Commodities: Coffee (NYBOT:KCK14) is up over 6% to $2.01, after heading below $1.90 this week. Coffee has been volatile due to weather uncertainty in Brazil. Gold (COMEX:GCK14) is down $8 to $1295.$1280 is our next key support level, then $1265. We now believe gold has a slightly bearish feel to it. We would not be surprised to see gold try to test below $1280. WTI crude (NYMEX:CLK14) oil is up $.24 to $104.00. It does indeed look like each time it tries to stay above $104, sellers have emerged.