The big ECB decision is only minutes away at 7:45 AM EST. The BOE kept rates on hold which is no surprise as incoming governor Carney, from Canada, testifies. Draghi is stuffing a jelly donut into his face and washing it down with some orange juice as his palms become sweaty, knowing he will move global markets on his words over the coming hour. The press conference occurs at 8:30 AM EST and Draghi's words are far more important since a cut today is not anticipated. European manufacturers and exporters are complaining loudly now as they watch the U.S. and Japan gain as they destroy their currencies. This pressures Draghi to announce a rate cut for the euro. If Draghi places his fingers in his ears and yells 'la, la, la...', ignoring the dilemma, the euro will remain stable in a sideways move and even head higher. Higher euro = lower dollar = higher copper, gold, oil, commodities and equities. If Draghi so much as coughs, and it sounds like he said 'future rate cut', the euro will plummet and so will equities. Lower euro = higher dollar = lower copper, gold, oil, commodities and equities. The euro is 1.3569.
Jobless Claims and Productivity and Costs are 8:30 AM. Natty Gas Inventories are 10:30 AM so pay attention to 400 milliseconds before 10:30 to see if the HFT robots offer up shenanigans like last week. Consumer Credit is at 3 PM to gauge the great American consumer. The earnings parade continues with PM, S, BG and others on tap. The utilities sector drama continues today. The market bulls win and the markets will run much higher if the bulls take out UTIL 475.49. The markets will tumble lower, dropping under SPX 1500 and lower, if the bears take out 467.62. If UTIL remains in the middle, the markets stumble sideways.
For the SPX today starting at 1512, the bulls only need to see a smidge of green in the futures (futures are positive now) and an upside acceleration will occur. Of course Draghi's decision will immediately send futures one way or the other. The bears need to push under 1505 to regain their mojo. A move thru 1506-1511 is sideways action today. The new moon is Sunday so the markets should lean towards the bear side from later today thru Monday afternoon. Okay, Mr. Draghi, what be your decision?
Note Added 2/7/13 at 7:51 AM: What's that? Ahem, Keystone nodded off a second as the ECB announces no change to the 0.75% rate. This was expected and as mentioned above, Draghi's words hold the magic and that hits at 8:30 AM one-half hour away. The euro is at 1.3563 a tiny drop from the number shown above before the announcement. The S&P's pull back one point. Look for wild action at 8:30-8:35 AM which will determine euro direction and global markets as described above. If Draghi is wolfing down donuts, then Keystone can have a slice of pecan pie.
Note Added 2/7/13 at 9:12 AM: S&P futures are staying positive, up three right now. Draghi says the 'economic recovery risks are skewed to the downside'. The euro drops like a stone to 1.3468. The bears cannot catch a break, however, the equities markets would be expected to be selling off now but they are not. The 10-year is 1.96% well under 2% so this hints that any pop in equities may be short-lived since money is remaining in notes and bonds today so far. Oil is 97.14. Copper is positive.
8:30AM events produced fast a furious albeit abbreviated gains in the metals and as I type this I just saw 235 contract purchase in the oil pits follow shortly thereafter by some very large consecutive gold sales at 9:12-914 I almost bought the 9:02 - 9:04 spike but it was alogo(D) look like a fake out - got go just got really ugly hundreds of millions of sales pouring into exchange gold is capitulating...
ReplyDeleteInteresting MCAP. The 10-year yield is interesting at 1.96%. Euro 1.3448, these things say down equities but the futures are flat.
ReplyDeleteits down now - not easy being able to see into the future as good as you do - great action today extreme volitility in Gold and Oil again it's getting very dangerious to trade my favorites I like to be out by 9:30 max.
DeletePretty clever. The bulls knew they might have problems because of the weak Euro, so they put their efforts into pushing up the utilities past Keybot's target. What is the threshold for next week, KS? Thanks as ever.
ReplyDeleteUTIL is playing games though Weaver so keep watching. Sometimes Keybot is very smart and ratchets up so it can bring the signal line up faster behind it, which makes the flip to the bear side easier. UTIL now at 475.26. Markets should be far weaker today due to euro but markets always surprise.
DeleteKS have you had a chance to read the aggregated cot report yet on the coffee I'm going to try and do it now but I'm about to turn the algo on for JO at this level and see if I can suck any sellers out of the market... coffee over at NYBOT is showing a little green off on the 30MIN chart just about bouncing on the low line of the channel.
ReplyDeleteIf you can show a link to coffee it will be annotated, gold, silver, oil, natty and others are monitored but do not have the coffee COT.
ReplyDeletehttp://www.cftc.gov/oce/web/coffee.htm
DeleteI'm still reviewing the COT data but here is a link…
From what I can gather about coffee from whom I deal with coffee could trade down to about 1.400 in the next hour or so which could bring another 10 or 15 cent hair cut to JO. But I don't think that will happen because there is a big fish buying dips in JO over the last few days so like I have seen in other ETF(s) and ETN(s) the price will be either be above or below where is should be artificially as traders anticipate future moves in the underlying.
Coffee futures should find support on the 1.400 and from there the futures will likely twist sideways to up giving JO some lift off and will likely trade up but more likely gap up overnight as it has in the past with those 50 cent pops it's notorious for. As the powers that be in the futures pits will eliminate as much trading of prices as possible as they just hammer price points on the electronic platforms… Or you may get a run into a pit session close but that’s not a likely probability. Long from 31.60 and will be more again at lower prices if they prevail and will be selling north of 32
Okay I'm using darkice to bid at 31.60 I'll read the report now when it gets here. Market Marker were stingy the other day should have given there 32.32 shares LOL look at this now they are floating down to test my resolve looks like they pulling bids to see me through I'm about to get filled....
ReplyDeletehttp://www.cotpricecharts.com/commitmentscurrent/
ReplyDeleteHere's a source for the COT's, coffee is KC. will check it out but coffee COT not as straight forward as gold or others. Will study it moving forward.