Issue Date: July 24, 2009
New Bull Market for Stock Index Futures
After a dismal June and early July, stock index futures broke out to the upside in spectacular fashion on July 13th. However, prior to this sudden change in sentiment, the technical outlook appeared bleak. There was a final leg down in the five week period that took place through the first part of June and into the beginning of July. The final blow off to the downside took place when the sell stops, that had likely accumulated under the May low of 871.00 in the June S&P 500 futures, finally were taken out. In just over a week, the rally the followed was able to take out the early June highs.
By Alan Bush
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Will the Federal Reserve raise interest rates or will Obama close Guantanamo Bay
Well some have time tables and some do not but on both counts the answer is that nobody knows. Now the bond markets seemed to be disappointed this week that there was no clear exit strategy by Federal Reserve Chairman Ben Bernanke. Despite the fact that he said rates will stay low for the foreseeable future his optimistic tone that Central bank actions have save the global economy from total disaster is not exactly the type of stimulating talk oil bulls want to hear. With mounting supplies of oil, these bulls want the Fed to say there are going to print more and more money so oil can continue to rise despite ample supplies. Real oil bulls know deep down inside that the real reason that oil has rallied the last quarter is the fed feeding in this historic stimulus. The oil rally had been a Ben Bernanke creation. Create some type of inflation to avoid the ugly alternative deflation. This is Ben’s oil market and seeing that Ben gave us the rally, he can also take it away. And even if Ben stays the course on strategy the oil bulls may want more Ben stimulus to keep the drive alive. Oil will need more outside stimulus to rally and if they do not get it the focus might slip back to worrying about supply.
By Phil Flynn
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We're On Tap to Harvest a Record Large Corn Crop
The corn fundamentals are becoming increasingly clear and my conclusion is that we’re likely to harvest a record large corn crop (or at least a record large yield) resulting in corn futures retreating to below $3.00. Eventually, I expect the front month corn futures to test $2.80 and possibly edge down to major support on the weekly chart near $2.60.
The latest information from the USDA indicated that U.S. producers devoted 87 million acres to corn production. This was above their previous estimate by 2 million acres and compares with 86 million planted to corn last year. However, on Wednesday July 22, the USDA announced they’ll be providing updated acreage information in their August 12 supply/demand report. They’re likely taking prevented planting insurance claims data from the Eastern cornbelt and factoring in a new acreage figure. I’m guessing they’ll likely reduce corn acreage by about 500,000 acres in this report. This likely will be considered friendly initially by the trade. However, increasing yield prospects will eventually rule the direction of the corn market.
By Dennis Smith
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