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Friday 11th of January Market Report

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Friday 11th of January 2013 as of 13:00 CET

The bulls are out in force, but for how long?

The S&P500 futures are unchanged this morning, trading at 1467 and Dax futures are up 14.50 points at 7722. Dax have been relatively weaker compared to the S&P500 over the last 3 sessions. The risk rally continued yesterday following the ECB press conference where Draghi left interest rates unchanged and said the decision was unanimous and together with positive Chinese data was enough to print 5 year highs in the S&P500 yesterday. The S&P500 futures traded up to 1471.50 overnight. Nikkei 225 index is up 9 straight weeks and trading at a 23 month high. Chinese Dec CPI data came in at +2.5%, the highest level in 7 months.  

Overnight Feds  Kocherlakota (non-voter) saying that monetary policy is too tight in the US and he sees 2.5% growth in 2013 and 3% growth in 2014. German Economic minister out saying that German Q4 likely to have contracted.

 

We have earnings from Wells Fargo today, market expectations are for 0.88 EPS.


We saw weaker than expected data from Germany again this morning, coming in at 0.2% vs.

 

Asia equity markets closed mixed with Shanghai down 1.87%, Australia’s S&P/ASX 200 down 0.29% and Nikkei 225 up 1.40%.

 

Technicals

Market

S&P 500 emini (ES)

Dax

Crude

Corn

Eur/Usd

Res 3

1480

7812

95.17

723

1.3400

Res 2

1475

7805

94.99

709

1.3350

Res 1

1471

7781

93.87

707

1.3320

Sup1

1463

7704

91.51

686

1.3022

Sup 2

1454

7682

90.99

678

1.2999

Sup 3

1446

7604

89.90

659

1.2896

ATM calls Vols. nearby month

13.08

13.35

22.22

25.79

7.20

100 EMA

1406

7311

91.28

728

1.2942

200 EMA

1381

7062

95.50

707

1.2879

14 Day avg. Volume

1248K

55K

109K

68K

165K

 

VIX closed down 0.30 points at 13.49 yesterday

SPY/TLT spread: 28.29 (widest level in weeks, which signals that the odds of a correction are increasing)

 

S&P 500 Emini futures – Trader up to 1471.50 overnight and the bulls are taking control so far this week. We have upper Bollinger Bands at 1475 and I think sellers will start to come today. Key levels are 1463 support and 1475 resistance. Keep in mind we have a big gap down to 1426 that is a worry for the bulls in the longer run, if we cannot break out cleanly in the next few sessions.

 

Dax futures – It traded to 7805 high last week and it did punch through the upper Bollinger band on daily chart at 7774, which was my upside target. A punch on the Bollinger Bands is an overbought

 

reading and I favour a move lower next to close the open gap at 7675 at least and possibly 7604 near term.  Key resistance is the upper Bollinger Bands at 7812 now.

Corn – It did bounce as expected and I think we have potential for 707 resistance on this bounce. The two day low at 686 have to hold to keep the bullish momentum going.

Crude Oil (Feb futures) –   It traded to a high of 94.82 yesterday and the next major objective on this rally would be the 200 day EMA at 95.39.

Euro – Seems like the downside was taken out a bit by the comments from Draghi yesterday and if 1.3320 resistance is broken we could pop towards 1.34. I still think it makes sense to sell towards resistance as I see this lower over more European debt problems.

Today’s Economic Calendar (CET):

14:30     US Trade Balance (exp. -41.1B)

               

 

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Risk Warning:      

Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by KBR Capital Partners AS with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Prices can go down as well as up. There is a significant risk involved in derivatives trading, including the risk of loss greater than the original investment. Past performance is no guarantee of future results.Conditions can vary from client to client, and therefore influence performance. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice.

 

 

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