Lower the market trends with no sign of a bottom quite yet! $1730.00 is an interesting level for fib studies. The data is all pointing toward contraction, so now it is just a matter of sentiment toward the economy and the markets. Earnings may be influenced by many factors that a commodity trader may view yet the factors are broken down into separate groups. Sentiment toward the markets is its own driver while the earnings reports may have heightened interest due to mergers & acquisitions along with many other corporate influences. The China slowdown and structural changes to become a consumption nation along with the reduced productivity in the US may just be the new norm for the global economies. There really does not seem to be a strong economy among other countries to weigh the US economy against. The mean average of normal may just have slide back a bit to fit the times. The E-Mini S&P 500 has been drastically oversold and may just need to bounce. Import Prices for December were -1.2 % while the previous reading was -0.4 %. Export Prices for December were -1.1 % while the previous reading was -0.6 %. The report has reflected a deep contraction in this area. It will depend on how many of these less than stellar reports come out in a row to determine the true health of the economy and whether the Fed may raise interest rates 3 or 4 times this year. China’s slowdown began the downtrend, but US data is keeping it in a downtrend. The Beige Book had little support for the market as consumer spending was only slight to moderate with weakness in the holiday apparel sales even. Auto sales fell back into a mixed activity area. Wages are flat to moderate. Agriculture and manufacturing suffer the pressures of the strong dollar along with just poor demand. Real Estate has been the strong sector, but will it be enough for the Fed to launch the expected four rate hikes this year? We often view the start of a new year as the pace and trend for the year and so far it has been weak. The last Nonfarm Payrolls for December came in at a whopping 292,000 while the previous reading was 211,000. The business and professional services increased by 73,000. Construction added 45,000 new workers. Temporary positions increased 34,000. Transportation and trade increased by 31,000. The government added 17,000 new employees. Manufacturing increased by 8,000 workers. Retail establishments added 4,300 employees. Mining sectors decreased jobs by 8,000 jobs. The Unemployment Rate was stuck at 5.0 % perhaps due to more people coming back to look for jobs as the outlook may seem brighter. The average hourly wages decreased a penny to $25.24. Consumer Credit was $14.0 billion while the previous reading was $16.0 billion. Revolving credit such as credit cards were up $5.7 billion. The Non-Revolving credit such as automobiles and student loans were $8.3 billion.
China must recognize its tremendous influence on the marketplace and attempt to balance its domestic and global economic roles as they seek to become a nation delving into consumption roles as opposed to the previous manufacturing nation. The Yuan has been devalued making the Chinese goods appealing for foreign buyers, but their acceptance into the IMF with their currency becoming a premier one used in the basket of currencies with the organization may not approve of the devaluations The Peoples Bank of China are hoping to maintain stability in their Yuan index and not pit it against the US Dollar. The weakened Yuan does add to the strength of the dollar creating that unfair advantage. Though the China rout was the primary named reason for the selloff to date, we still have a pending Saudi Arabia/Iran war and a possible Hydrogen bomb in North Korea. Even if China was drifting sideways, the markets may have the jitters. Liquidation had been rampant, so the oversold conditions perhaps are due for a bounce. Once traders start to feel that a bottom may be in, then the bargain hunters may return to the marketplace with a focus on earnings. The World Bank has pared down their forecast of global growth to 2.9 % from the 3.3 % they had in June! The global economy rose to 2.4 % last year. China was shaved to 6.7 % for 2016 while forecasts in June were 7 %. The US growth was also reigned in to 2.7 % from forecasts of 2.8 % last June. China is revising their economic model to that of a consumption and services nation as manufacturing is drastically down. The slowdown in China is attributed somewhat on the change in focus as well as the weakness in productivity. Russia is also forecast to contraction along with the BRICS nations. Any one of them may create contagion fears in the trading markets. Fed Chief Loretta Mester of Cleveland responded to the slump by pointing out that the Fed took the weakening economy in China and built it into the Fed’s monetary policy equation. The Federal Open Market Committee is to next meet on January 26th and 27th. Federal Reserve Bank of Richmond President Lacker emphasized that the Chinese and US economies are not linked as greatly as the market conditions seemed to define and that it may have just been an overreaction. Chairperson Janet Yellen has said that “markets and the public should be thinking about the entire path of policy rates over time” insinuating that the earlier rate increases may lead to more gradual increases over time. The FOMC forecasts the interest rates in the US to be at 1.375 % by December 2016. The VIX CBOE Volatility Index was up 12.82 % to 27.02 today. Some investors may use the VIX as a tool to hedge the indexes or a stock portfolio. The VIX is the Chicago Board of Options Exchange Volatility Index which usually trades inversely to the stock indices. Out of the Thirty-Two S&P 500 companies reporting earnings for the Q4:2015, 22 have come in above expectations and 8 missed expectations while 3 met expectations.
The PPI-FD for December was -0.2 % while the previous reading was 0.3 %. The PPI-FD excluding food & energy was 0.1 % while the previous reading was 0.3 %. The PPI-FD excluding food, energy and trade services was 0.2 % while the previous reading was 0.1 %. Retail Sales for December was – 0.1 % while the previous reading was 0.2 %. The Retail Sales excluding automobiles was -0.1 % while the previous reading was 0.4 %. The Retail Sales excluding automobiles and gasoline was 0.0 % while the previous reading was 0.5 %. The Empire State Manufacturing Survey of General Business Conditions Index for January was -19.37 while the previous reading was -4.59. Industrial Production for December was -0.4 % while the previous reading was -0.6 %. The Capacity Utilization 76.5 % while the previous reading was 77.0 %. The Manufacturing is -0.1 % while the previous reading was 0.0 %. Consumer Sentiment for January 2016 was 93.3 while the previous reading was 92.6. Business Inventories for November 2015 were -0.2 % while the previous reading was 0.0 %. The Initial Jobless Claims was up 7,000 to 284,000 while the previous reading was 277,000. Continuing Claims were up 29,000 to 2.263 million with a one-week lag time. Import Prices for December were -1.2 % while the previous reading was -0.4 %. Export Prices for December were -1.1 % while the previous reading was -0.6 %. The report has reflected a deep contraction in this area. Bloomberg Consumer Comfort Index for the week of January 10 was 44.4 while the previous reading was 44.2. Money Supply for the week of January 4th was -$16.7 billion while the previous reading was -$10.8 billion. The Atlanta Fed Business Inflation Expectations for January of business inflation expectations are 1.8 % while the previous expectations had been 1.9 %. The MBA Mortgage Applications Composite Index for the week of January 8th was 21.3 % while the previous reading was -27.0 %. The Purchase Index was 18.0 % while the previous reading was -15.0 %. The Refinance Index was 24.0 % while the previous reading was -37.0 %. The Beige Book was released today with a weaker indication of growth targets. The Treasury Budget for December was -$14.4 billion while the previous reading was -$64.6 billion. The NFIB Small Business Optimism Index for December was 95.2 while the previous reading was 94.8. For more information on this index, you may visit http://www.nfib.com/. Redbook Store Sales for the week of January 9th were 1.7 % while the previous reading was 2.9 %. The Labor Department’s Job Openings and Labor Turnover for November was 5.431 million while the previous reading was 5.383 million. Last Friday’s Nonfarm Payrolls for December came in at a whopping 292,000 while the previous reading was 211,000. The Unemployment Rate was 5.0 % while the previous reading was 5.0 %. The Private Payrolls were 275,000 while the previous reading was 197,000. The Average Hourly Earnings was 0.0 % while the previous reading was also 0.2 %. The Average Workweek was 34.5 hours while the previous reading was 34.5 hours also. The Participation rate was 62.6 % while the previous reading was 62.5 %. Real GDP for Q3f:2015 was 2.0 % while the previous reading was 2.1 %. The GDP Price Index was 1.3 % while the previous reading was 1.3 %.
Monday, what to expect? We maintain a now bearish bias unless the (March) E-Mini S&P 500 penetrates $1982.75. Monday, we anticipate an inside to lower day! Today’s range was $1921.00 – $1849.25. The market closed at $1875.00. Our comfort zone or point of control for this market (March) appears to be $1878.50. Our potential range for Monday’s trading could be $1904.50 – $1824.50. Potential bottom could be $1730.00.
E-Mini S&P 500 Chart
(Provided by QST 1/15/2016 6:17 PM)
https://plus.google.com/communities/114456349514681998750
Reserve A Seat In The Next Orientation Class
As part of the trial you will receive:
The CFRN Weekly Trading Zones
5 Days In The Live Trading Room
5 Days Use Of Our Platform And Proprietary Indicators
5 Days Of Our Concierge Trade Alert Service
Unlimited Private Mentoring
We will spend 30-60 minutes your first day in Orientation to make sure you understand how to trade the Alerts and to allow me to answer any questions you have.When you sign up for the Trial I will reserve you a spot in the next class.
http://www.cfrn.net/apply/
Trading’s not easy, but it can be simple!
Want to speak with an Emini Expert?
Book Your Personal Mentoring Session Today!
Choose a day and time convenient to you…
Our Weekly Trading Zones and Chart Room Access are emailed to members prior to the open every Monday. Join us M-F from 9am-1pm Eastern for Live Charts, Live Trading, and Lively Discussion.
Please note that timing is everything and while we may divulge a brief overview of what may affect tomorrow’s market, trade set-ups are strategically planned according to time and price action. In this marketplace, a trader needs to arm themselves with the weaponry to deploy into a complicated marketplace. The CFRN Live trading room is your boot camp for your commodity future.
Please note that CFRN articles may be co-written or uploaded by the editorial staff or contributing members.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
DeWayne Reeves is the founder of CFRN and host of a popular radio program heard daily in over 20 countries. A former equities trader, he has focused primarily on the S&P 500 Emini Futures Market for the past 5 years. His insights and trading methodology are a blend of traditional technical analysis and the strategic use of proprietary indicators. He is the founding director of New Hope Orphanage and Primary School in Kampala Uganda East Africa which is home to over 800 orphans. Mr Reeves currently resides with his wife in Phoenix Az. where he actively trades his personal account.
Tune in M-F from 11am-1pm Eastern for market analysis, technical tips and lively discussion. CFRN / www.cfrn.net
The post E-Mini S&P 500: The drop is not getting the pop quite yet! appeared first on RedlionTrader.