Archive for November 5, 2013

Technical Levels

Commodity Support 1 Support 2 Resistance 1 Resistance 2
Gold 1310 1305 1320 1327
Silver 21.59 21.36 21.85 22.03
Copper 3.259 3.250 3.270 3.385
Crude 94.33 94.04 94.90 95.21
Commodity Contract S3 S2 S1 R1 R2 R3
The gold market waffled around unchanged early this morning but seemed to catch a bit of a bid into mid session. 
With modest weakness in the Dollar, higher equities and countervailing US scheduled data, the gold market was lucky to have come away with a slightly positive bias this morning. Factory orders were a touch weaker than expectations, while the ISM New York current Business Index showed a fairly significant jump. All things considered, the magnitude of the rise in the regional ISM might have countervailed some of the major headline status of the Factory orders results. This morning Gold did manage to rally in the face of the ISM improvement and then it fell back somewhat in the wake of the weaker factory orders report! In other words, gold seemed to need positive US data to rally this morning and that would seem to fly in the face of gold’s patterns last week.
December silver fell back into the US scheduled data window and then recovered 9 cents in the face of the stronger than expected ISM report. 
Unfortunately December silver also fell back in the wake of the slightly softer than expected US Factory orders results. Therefore traders could suggest that silver is indeed acting like a physical commodity market in need of positive progression in the economy again and that in turn would seem to downplay the threat of tapering and the threat of adverse currency market action.
After an initial rally on Friday, December copper prices appeared for some traders to lose their initial positive tone, and finished last week roughly 4.00 cents below their weekly highs. 
Many in the market feel that the most notable development for copper last week was improved Chinese economic data and slightly better than expected US economic data. However, copper recently saw a halt in a long held pattern of daily LME exchange copper stock declines. 
In addition, there was also an increase in weekly Shanghai copper stocks at the end of last week. The market was also presented with a series of higher copper production readings from China, Mexico and South America last week. Some traders that while supply has become a slightly negative issue for the market, and hopes for improved copper demand was able to strengthen copper prices last week in the face of overt weakness in a number of other commodities
The oil complex spent time on both sides of unchanged today as the market continues to digest bearish US oil fundamentals and technicals against a backdrop of mixed external price drivers.  Equities have remained mostly in positive territory over the last twenty four hours while the US dollar Index finally was hit with a light round of profit taking selling ending the day in negative territory and thus a slightly positive price driver for the oil complex today.
Global Economic Data
Time Data Prv Exp Impact
8:30 PM ISM Non-Manufacturing PMI 54.4 54.2 High
8:30 PM IBD/TIPP Economic Optimism 38.4 41.1 Low
ISM Non-Manufacturing PMI
Source Institute for Supply Management (latest release)
Measures Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, on the third business day after the month ends;
Next Release Dec 4, 2013
FF Notes Above 50.0 indicates industry expansion, below indicates contraction. Source changed series from unadjusted to seasonally adjusted as of January 2001. Source changed series calculation formula as of Feb 2008;
Why Traders
It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy;
Derived Via Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;
IBD/TIPP Economic optimism
Source TIPP (latest release)
Measures Level of a diffusion index based on surveyed consumers;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, around the middle of the current month;
Next Release Dec 11, 2013
FF Notes Above 50.0 indicates optimism, below indicates pessimism;
Derived Via Survey of about 900 consumers which asks respondents to rate the relative level of economic conditions including six-month economic outlook, personal financial outlook, and confidence in federal economic policies;
Also Called IBD/TIPP Consumer Confidence;