Futures Market Technical and Fundamental Recap
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Today's Futures Analysis summary
Signs of a recovery in the U.S. economy led traders to aggressively sell Treasuries bought as safe haven investments driving up yields this week. Money was clearly flowing out of the lower-yielding T-Bond and T-Note futures into higher risk equity markets in an effort to gain a better return.
June E-mini S&P 500 futures closed sharply higher this week and in a position to break out to the upside through the last main swing top at 938.25. A trade through this price will make a new high for the year and indicate the potential for a rally to 50% of the entire contract range at 1051.75. Investors are now a little more optimistic about owning stocks because the Fed’s bank stress test and April Unemployment Reports are out of the way.
The U.S. Dollar lost ground against most major currency futures this week as signs of a recovery in the U.S. economy led to speculative buying in higher yielding assets. Investors have been aggressively selling excess U.S. Dollars bought as a safe haven investment against a global economic meltdown. Now that the global economy seems to be on the mend, traders want to put their money to work.
July Silver finished the week on its high and in a position to complete its technical retracement to 15.25. Investors are speculating that a quick recovery in the global economy will trigger an inflationary blip.
June Crude Oil turned the main trend to up on the weekly chart for the first time since the week-ending August 8, 2008. The wide support base that has been built indicates the potential for a huge breakout to the upside with 94.38 the eventual minimum upside target. Traders speculating on increased demand for crude oil combined with an OPEC production cut later this month could be the catalysts which drive this market higher.
Lower production in South America and increased demand from China helped trigger a breakout to the upside on the weekly chart in July Soybeans. Tight supply conditions coupled with firm demand could launch this market to 1223 even before weather becomes an issue.
Signs of a global economic recovery are leading to speculation of increased demand for Cocoa. This week July Cocoa reflected this speculative point of view and surged to the upside.
Speculative buying also triggered a change in trend to the upside in July Coffee. The challenge next week will be at 127.35. A break through this level could take this market to 144.00. This market is being buoyed by price support from Brazil and the prospects of greater demand because of an easing of global economic pressures.
By FuturesHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis.
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