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In This Issue
Economic Reports and How They Affect Your Trading
Gold Bears Gain Downside Technical Power
Economic Reports and Expiration Notices
GOOD TRADING!
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Newsletter Archives
December 30, 2008
The two key forces that move market prices are fundamentals and technicals. These two very different philosophies of trading and price discovery can be reliant on the other. As a position trader or day trader it is important to understand each of these components because they are dependent upon one another. You must understand the fundamental aspects of the market to see why the technicals are trading and acting the way they are and vice versa. We must first understand basic market fundamentals and where we can start understanding this is through the news.
A good place to begin is with the economic reports that are sent every month at regularly scheduled time. As traders once we have solid understanding of what these reports mean we can then start applying them to the market and seeing how the market prices can react to the information. Over the next few newsletters we will discuss key economic reports. Here is part two in the series:
ISM INDEX (Formerly the NAPM Survey): The Institute of Supply Management Index otherwise known as the National Association of Purchasing Managers survey is a composite diffusion index of national manufacturing conditions. Readings above 50% indicate an expanding factory sector. The ISM Index (NAPM) helps economists and analysts get a detailed look at the manufacturing sector of the economy. Since this is a major source of strength for the economy and that can reflect the Nations employment condition this report is a very important to watch.
Consumer Confidence: This is a survey or a poll of consumer's opinions regarding both their present conditions as well as their expectations regarding their economic conditions. Five thousand consumers across the country are surveyed each month. The theory here is the level of consumer confidence is directly related to the strength of consumer spending. Consumer spending accounts for two-thirds of the economy. If consumers are confident that times are good, spending is likely to remain stable or even increase. If consumer confidence is weak, then more times than not consumers save and do not spend money. This shift in spending habits can help or hurt the developments in the economy from durable goods sales to home or car purchases. If consumers are not confident then they are less likely to purchase those big ticket items like a new home or that new car.
Continue reading Economic Reports and How They Affect Your Trading: Part Two for FREE.
Cannon Trading respects your privacy and will never give this information to a 3rd party.
by Jim Wyckoff
December gold futures on Wednesday hit a fresh five-week low of $908.20 as a steep two-week-old downtrend is in place from the July 15 high of $999.40. Price action this week has also seen a bearish downside "breakout" from a bearish pennant pattern on the daily chart. The bears have gained solid downside technical momentum recently and their next downside price objective is pushing and closing prices below major psychological support at $900.00 an ounce. A close below $900.00 in December gold would open the door to a challenge of strong technical support at the June low of $869.00. For the gold market bulls to begin to regain some upside near-term technical strength, they would have to push and close December futures prices above strong chart resistance at the last "reaction high," located at $945.20. From a Fibonacci technical perspective, price action in December gold this week has also turned significantly bearish as prices have fallen below the 50% and 38.2% retracement levels of the price move from the June low of $869.00 to the July high of $999.40. The 50% retracement level came in at $935.00 and the 38.2% retracement level came in at $919.00. Importantly, gold traders will continue to keep one eye on the value of the U.S. dollar versus the other major currencies. The greenback has made a rebound recently, and further dollar strength in the near term would likely mean still more downside price pressure for the precious yellow metal.
Jim has an EXCELLENT daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at JimWyckoff.com
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 07/31 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Chain Deflator-Adv(Q2) 7:30 AM CDT - Employment Cost Index(Q2) 7:30 AM CDT - GDP-ADV(Q2) 8:45 AM CDT - Chicago PMI(Jul) 9:35 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
FN: Aug Soybeans(CBT)
Aug Soybean Meal(CBT) Aug Soybean Oil(CBT) Aug Copper(CMX) Aug Platinum(NYM) Aug Palladium(NYM) Aug Silver(CMX) Aug Gold(CMX) LT: Jul Fed Funds(CBT) Aug Heating Oil(NYM) Aug RB Gasoline(NYM) Aug Lumber Options(CME) |
| 08/01 Fri |
7:30 AM CDT - Ave Workweek & Hourly Earnings(Jul)
7:30 AM CDT - Nonfarm Payrolls & Unemploy Rate(Jul) 7:30 AM CDT - Dairy Product Prices 9:00 AM CDT - Construction Spending(Jun) 9:00 AM CDT - ISM Index(Jul) Auto & Truck Sales(Jul) |
LT: Aug Live Cattle Options(CME)
Aug Frozen Pork Bellies Options(CME) Sep Cocoa Options(ICE) |
| 08/04 Mon |
7:30 AM CDT - Personal Income & Spending(Jun)
9:00 AM CDT - Factory Orders(Jun) |
FN: Aug Heating Oil(NYM)
Aug RB Gasoline(NYM) |
| 08/05 Tue |
9:00 AM CDT - ISM Services(Jul)
1:15 PM CDT - FOMC Policy Statement |
FN: Aug Frozen Pork Bellies(CME)
|
| 08/06 Wed |
9:35 AM CDT - API & DOE Energy Stats
2:00 PM CDT - Consumer Credit(Jun) |
|
| 08/07 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - Pending Home Sales(Jun) 9:35 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
FN: Aug Live Cattle(CME)
|
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!