Futures Market Technical and Fundamental Recap
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Today's Futures Analysis summary
The strong rallies from the lows may be a sign that shorts are getting ready to cover their profitable positions in the June Treasury Bonds and June Treasury Notes. Although at times today, yields were able to rise they did not close on their highs, indicating that selling pressure may subside now that the Treasury auctions are coming to a finish. The longer term concerns remain inflation and how the Fed is going to exit from its currently disastrous strategy.
Equity indices continued to tread water on Thursday trading inside several ranges it had created this month. Bullish traders are concerned that rising interest rates will cause borrowing costs to increase in the future causing corporate profits to drop. Other traders are looking at possible inflation as a bullish factor as bond holders may seek better returns in the equity markets.
The U.S. Dollar was mixed on Thursday. Traders are confused as to whether the rise in interest rates will attract foreign investment to the U.S. or raise concerns that the U.S. Treasury may not be able to pay off its debt. More foreign investment will mean a stronger Dollar.
The mixed U.S. Dollar helped August Gold gain upside traction as this market powered through a key Fibonacci retracement price at 954.90. The charts indicate the next target is the March 20 top at 971.00. Traders are buying gold in anticipation of a spike in inflation. Concerns are being raised as to whether the Fed has the weapons to defend the economy against inflation.
July Crude Oil is well on its way to its first objective of $70. Several weeks ago Iran, Venezuela and Russia all agreed that crude would have to hit this price to be profitable, and it looks as if this forecast will come true. News that OPEC would not cut production a third time has been well received by the market. Traders are now focusing on more signs of a global economic recovery to increase demand.
July Soybeans have formed a minor top at 12.00 3/4. This is a sign that momentum has slowed down. The next upside target remains 12.23, but this market may have to pull back in order to attract fresh buying. In the worst case scenario, the market may break all the way back to 10.88. The supply/demand fundamentals support a rally, but this week’s stronger Dollar has put a lid on demand
By FuturesHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis .
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