Tuesday, November 16, 2010

Emini Futures Trading / The Bulls Have Left The Building


from the trading desk of CFRN...

The Bulls have left the building! We slipped today to a low of$1171.00 from a high of $1195.25 achieved at the open of the session yesterday at 3:30 PM CST. Traders expecting a bounce toward the close only experienced the disappointment of another leg down.

The main driver of the markets was the sovereign debt in Ireland. Ireland really is only a potential starting point as other countries such as Greece and Portugal are still in question. The sentiment is that if the debt- ridden countries are seeking rescue packages, the sovereign debt situation could escalate beyond the capacity of bailout funding. President Barack Obama is en route to Lisbon on Friday/Saturday to discuss the economic conditions in Portugal at the NATO summit. George Soros made comment on China’s growth and the US falling behind as the global pecking order places emphasis on China. Ireland is still on the table in terms of the rescue package details.

For our US Economic Reports today: US Industrial Production was flat in October. Capacity Utilization was flat. The US Core PPI fell .6%.  

Again, the US Dollar Index had a run to $79.585 that weighed on the other markets. Supported by news of the Euro FX debt woes, the dollar usually works inverse to the Euro FX. We do not see a resolution in sight, so the direction of the dollar may be perhaps inside day tomorrow to higher. The US T-Bonds also benefited as a safe-haven vehicle up 1^16 on the day.

Our CFRN Weekly Trade Zones of $1187.00 - $1188.00 and $1181.00 - $1182.00 were covered in today’s session.

Tomorrow we look forward to CPI, Housing Starts and Permits and Real Earnings. 

The trend remains down, but we could get an inside day reflecting a slight bounce as traders await direction from the US Dollar.

$1182.50 appears to be a point of control or comfort zone for the market. Should we breach the $1225.00 zone, our CFRN Weekly Trade Zone gives us $1231.00 - $1232.00. If we stay capped, our CFRN Weekly Trade Zones are $1215.00 - $1216.00, $1205.00, $1206.00. We may find the CFRN Weekly Trade Zone $1199.00 - $1198.00, $1187.00 - $1188.00 and $1181.00 - $1182.00. In this type of retracement, we may find ourselves back at CFRN’s Weekly Trade Zone $1163.00 - $1164.00 or further. A consolidation in this area would not surprise me! 

Life's blows cannot break a person whose spirit is warmed at the fire of enthusiasm. Norman Vincent Peale

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