Equities



S&P 500 September Emini Futures Contract (ES U8)



- Emini continues to consolidate within a large trading range since the contract bottomed in July. As traders continue to take advantage of the ranging market and push the contract higher, a further move to above the psychologically important 1250 handle will most likely see the Emini bulls test offers around 1260, a level defended by the combination of the Aug 20 low and 23.6 Fib of the 1442-1200 equity selloff. A further move to the upside will most likely see the traders once again testing the downward sloping trendline that dominated the price action since May. A successful breakout will most likely see the contract head higher and target 1300 figure, a level established by the Sept 02 spike high



Interest Rates



Eurodollar June 09 Futures Contract (GE M9)



- Eurodollar futures traders experienced a bout of extreme volatility following a unsuccessful attempt by the bulls to rally the contract above 97.00 handle with the price action failing to hold the bids above 97.20 figure, a level defended by the combination of Apr 2 lows and 61.8 Fib of the Apr-Jun Eurodollar selloff at 97.15. A subsequent move to the downside saw the contract break below 97.00, but failed to close below the handle, thus putting the contract into a neutral stance as both sides find themselves in a stalemate. Another attempt by the Eurodollar bulls will most likely see the contract once again try to break above 97.20, with a further move to the upside seeing GE M9 targeting offers around 97.50 handle, a level defended by the 78.6 Fib of the Apr-Jun Eurodollar rally. A move to the downside from current levels will most likely see the contract slide below 96.93, a Sept 5 low and test the upward sloping trendline around 96.90. A sustained break to the downside will most likely see the bears push the contract lower and target bids around 96.67, a level defended by the 38.2 Fib of the 95.79-97.22 Eurodollar rally



NYMEX/COMEX Futures



Crude Oil October Futures Contract (CL V8)



- Crude oil futures continued to tick lower as price action remained confined to a downward sloping channel that dominated the price action since July. As contract continues to head lower, a break below 105.00 figure will most likely see the crude gain further downside momentum and target the psychologically important 100.00 handle, a level marked by the number of key support zones, with most notable levels including 50.0 Fib of the 50.00-147.00 Crude oil rally, a Nov2007-Feb2008 consolidation high and March 20 swing low. A break below the psychologically important 100.00 handle, will most likely see the contract spike lower and test the bids around 95.00 figure.



Natural Gas October Futures Contract (NG V8)



- Natural gas continued to retrace from the recent 10-months lows after contract failed to break below the psychologically important 7.000 handle, a level defended by the combination of the 78.6 Fib of the 5.240-13.690 Natural Gas rally and Dec 2007 consolidation lows. As Natty bears continue to take profits following a sharp selloff after hurricane season failed to dent Natural Gas production in the Gulf of Mexico, a further move to the upside will most likely see the contract head above 7.500 figure and test offers around 7.720, a level established by the tweezer candlestick pattern marking the August consolidation range lows. A break above will most likely see the bull target 8.620, a level defended by the 23.6 Fib of the 13.800-7.020 Natty selloff and August highs around 8.800 handle.



Gold December Futures Contract (GC Z8)



- Gold continued to tread sideways in the consolidation range as contract remained confined to a downward sloping channel that dominated the price action since July. As volatility continues to build, a move below the psychologically important 800.00 handle will most likely see Gold bears push the contract lower and with a move below 778.00 figure, a level established by the Aug 15 low, most likely seeing the metal head lower and testing the bids around the psychologically important 750.00 handle. A sustained momentum to the downside will most likely see Gold lose further value as it tumbles toward 730.00, a level defended by the May 2006 high and 78.6 Fib of the 646.00-1035.00 Gold rally.



CBOT Grain Futures



Corn December Futures contract (C Z8)



- Corn futures continued to head lower after the contract failed to hold on to the bids around the psychologically important 5.500 handle. A further move to the downside will most likely see the contract head lower and target the bids around 5.376, a level defended by the 61.8 Fib of the 3.754-7.992 Corn rally. A sustained break to the downside will most likely see the contract targeting bids above the psychologically important 5.000 handle, a level defended by the March 24 and Aug 12 lows. A sustained momentum to the downside will most likely see the contract extended its decline toward 4.840 figure, a level marked by the Jan 2008 tweezers candlestick pattern low.



Wheat December Futures Contract (W Z8)



- Wheat futures continued to trade lower as contract broke below the triangle's lower boundary at 7.700 and fell toward the psychologically important 7.500 figure. A further move to the downside will most likely see Wheat bears test the bids around 7.100, a level marked by the Oct-Dec of 2007 consolidation range high, and with sustained momentum to the downside most likely seeing the contract break below the psychologically important 7.000 handle. A further move to the downside will most likely see the contract extend its decline toward 6.500 figure, a level defended by the combination of the 78.6 Fib of the Apr 2007-Apr 2008 Wheat rally and Oct-Dec of 2007 consolidation range low.



Soybean November Futures Contract (S X8)



- Soybean futures remained in a downward sloping channel as traders continued to hammer the bids with the latest move to the downside seeing the contract testing defenses around 11.700, a level marked by the 78.6 Fib of the Apr-June Soybean rally. A successful move to the downside will most likely see the contract break the neck of the large Head and Shoulders pattern, which can been observed on both daily and weekly charts, thus seeing Soybeans breaking below 11.500 figure, a level defended by the 50.0 Fib of the October 2006 - June2008 Soybean rally at 11.303. A sustained move to the downside will most likely see the contract gain further momentum below psychologically important 11.000 handle and target bids around 10.500, a level marked by the Apr 1 spike low.



FX Market as of 9:30 GMT (5:00 AM EST)



EUR/USD (Euro vs US Dollar)



- Euro continued to head lower after an attempt to regain the control of the price action and push the pair above 1.4400 figure by the single currency bulls have failed. As dollar bulls continue to dominate the price action, a further move to the downside will most likely see the pair extend its decline toward 1.4200 figure, a level defended by the Oct 02, 2007 spike high. A further move to the downside will most likely see the pair head lower and target the bids around a psychologically important 1.4000 handle, a level marked by the Oct 09, 2007 spike low. A sustained momentum to the downside will most likely see the dollar bulls aim for the bids above 1.3800 handle, a level defended by the combination of 50.0 Fib of the 1.1639-1.6037 Euro rally and June-Sept 2007 consolidation range high.



GBP/USD (British Pound vs US Dollar)



- Sterling bulls were in full retreat after the failure to regain the bids around the psychologically important 1.8000 handle and once again fell toward recent lows above 1.7600 figure. As dollar bulls regain the control of the price action and push the pair lower, a further move to the downside will most likely see the cable bulls retreat below the psychologically important 1.7500 handle, a level defended by the combination of the 1.618 Fib extension of the 2.1161-1.9338 USD rally and 50.0 Fib retracement of the 1.3685-2.1161 2002-2007 GBP/USD rally. A sustained momentum to the downside will most likely see the GBP/USD extend its decline toward 1.7200 figure, a level defended by the Feb-Apr 2006 minor consolidation range lows.



USD/CHF (US Dollar vs Swiss Frank)



- The Swiss Franc followed its European counterparts in general retreat against the onslaught of the US dollar bulls. As USD/CHF continues to head higher within a narrow upward sloping channel, a further move to the upside will most likely see the pair target offers around 1.1400 handle, a level defended by the 61.8 Fib of the 1.2460-0.9646 Swiss Franc rally. A sustained momentum to the upside will most likely see dollar bulls push the pair higher and target Swiss Franc offers above the psychologically 1.1500 handle, with successful breakout seeing greenback traders targeting 10-months highs around 1.1625, a level marked by the December 2007 spike high.

Americas Macro sector headlines

• Today 00:54am
  (US) The Office of the Comptroller of the Currency is paying closer attention to about 100 community banks - WSJ- These banks are are seen as having large exposure to weak commercial real estate more...
  
• Today 00:23am
  (US) WSJ reports that airline consultant and onetime union leader Duane Woerth is the top contender to head the FAA- The report cites people close to Obama's transition team. - Woerth was president more...
  
• Yesterday 09:27pm
  (NZ) According to a report from Wizard Home Loans, NZ's Oct housing affordability was at its best level in 2.5 yrs
  
• VZ Yesterday 09:00pm
  Verizon Communications President-Elect Obama's cell phone records were accessed by employees at Verizon - CNN- The phone records were from an old phone no longer in use. - Follow Up: Verizon Wireless said that it will more...
  
• Yesterday 08:57pm
  (US) WSJ reports that the Treasury announced it will help liquidate a Reserve Management Corp money-market fund; The fund is the US Government Fund which has AUM of around $10B- The Treasury is more...