Issue Date: February 04, 2010
The Outlook for Stock Index Futures, January Indicators and Fundamentals
The January Indicators
Indicator #1
This technical seasonal indicator is giving a bullish signal. Since the early 1970's a big advance on the first trading day in January has been a very good indiactor that equities will register substantial gains for the rest of the year. On Monday January 4th, there was encouragintg news about the the manufacturing sector which helped the Standard & Poor's 500 index to advance 17 points and the Dow Jones Industrial Average to gain 155 points. Studies have shown that any time the S&P500 has advanced over 1% on the first trading day of the year, the index was able to close higher for the year about 85% of the time.
By Alan Bush
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Pigs in Space
Normally when I go down on the trading floor and talk about pigs we are referring to hogs or pork bellies. Of course this week we are talking about the countries Portugal, Ireland, Greece and Spain. Or you can exchange or add another I if you want to throw in Italy. Portugal now seems to be the main epicenter of the constantly shifting risk factors in the ongoing global economic crisis. Even casual observers of the global market place have been aware of the recent problems growing in the Eurozone particularly with Greece. Greece massive debt has roiled the global market for most of the year and now there are fears that their problems may be spreading throughout the region. Oh sure the other countries within the designation PIGS or PIIGS if you prefer did not want to be coupled together with Greece perhaps because they did not want to be part of something called PIGS or because they were fearful that that association with Greece then the problems with Greece could spread to them faster than Swine flu. (which by the way I am sure that the CME group and hog farmers around the world would want me to remind you that you can’t catch swine flu by eating Pork. So go ahead and but bacon on that cheese burger). Countries like Spain are trying to disassociate themselves like when Spain’s Finance Minister Elena Salgado said that Spain's situation is not like that of Greece.
By Phil Flynn
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Can Wheat Work Higher From These Levels?
The wheat sell off experienced on Wednesday may have exhausted the heavy selling for the time being. The front month contracts in all three wheat markets had basically posted new four month lows prior to a modest short covering rally. From a technical stand point, these markets remain oversold. The short covering rallies of late have been minor and usually fail late in the session. Today the short covering rally remained intact late in the session.
For the time being, the market looks poised to develop a rather broad trading range. With a little help from the outside markets, crude not down $4.50 and the dollar not being up .500, a short covering rally in wheat should be able to build some momentum. Expect rallies in the wheat market to be limited by the massive global supply of wheat.
By Brian Henry
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