The Hightower Report

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

Global equity markets have started out on a positive footing overnight in the wake of mostly positive international economic readings and seemingly because of upbeat comments from Chinese leadership. However, the Chinese situation wasn’t overly upbeat, as Chinese officials suggested that softer growth in that country ahead might prompt an easing of policies and some in the trade might have hoped that China was already in an easing posture. On the other hand, world equity markets saw favorable German unemployment readings and for the time being, that seems to have papered over the fears toward Euro zone sovereign debt. Some bulls might be partially off balance as a result of fears of soaring oil prices but to start today that issue seems to be sitting on a back burner. In fact, with Indian equities trading higher, European stocks showing early gains and early indications of a 20 to 23 point higher opening in the US S&P contract, the bull camp looks to have a solid edge to start. Furthermore the trade is also expecting to see something positive from the US scheduled report slate this morning and that might give the bull camp an added measure of bullish psychology.

S&P 500: A huge gap up opening seems to have established a rather lofty ambition by the S&P bulls this morning. With the opening rally posting the highest trade since the October 27th spike high, the bull camp probably needs to see mostly positive US scheduled data just to add to the early gains. In fact, the 1282.40 level might be seen as an extremely critical pivot point in the first two trading sessions of this week. However, the bull camp does seem to have the benefit of several merger/buyout stories overnight but the fear of turmoil in the Middle East might keep some would-be bulls on the sidelines. The Commitments of Traders Futures and Options report as of December 27th for S&P 500 Stock Index showed Non-Commercial traders were net long 8,722 contracts, an increase of 6,998 contracts. The Commercial traders were net short 14,913 contracts, an increase of 2,164 contracts. The Non-reportable traders were net long 6,190 contracts, a decrease of 4,836 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 14,912 contracts. This represents an increase of 2,162 contracts in the net long position held by these traders. The bulls have control as long as the March S&P manages to hold above 1270.00 this morning.

DOW: After some extremely volatile action last week, the March Dow contract looks to start the holiday shortened week on a very positive track. In addition to a small measure of catch up buying action, the Dow might be cheered by the prospect of a more supportive PBOC policy stance ahead and the index is also likely to draft favorably off a quasi risk-on vibe. A key resistance point in the March Dow contract was seemingly violated early this morning at 12,346, with yet another critical pivot point seen up at 12,381. In fact, the bull camp has to feel confident in their position, as long as the March Dow manages to hold above 12,340 through the flow of scheduled US data later this morning. The Commitments of Traders Futures and Options report as of December 27th for Dow Jones Index $5 showed Non-Commercial traders were net long 17,834 contracts, a decrease of 4,223 contracts. The Commercial traders were net short 20,208 contracts, a decrease of 4,030 contracts. The Non-reportable traders were net long 2,373 contracts, an increase of 193 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 20,207 contracts. This represents a decrease of 4,030 contracts in the net long position held by these traders.

NASDAQ: With a big range up extension forged this morning that would seem to confirm the moderately bullish bias from the overnight action will be extended into the US Tuesday trade action. However, the tech sector appears to be catching a ride from big picture macro economic developments instead of from the tech sector news and therefore the bulls have to hope that scheduled US data adds to the bullish vibe later this morning. The Commitments of Traders Futures and Options report as of December 27th for Nasdaq Mini showed Non-Commercial traders were net long 14,628 contracts, a decrease of 7,678 contracts. The Commercial traders were net short 30,195 contracts a decrease of 6,122 contracts. The Non-reportable traders were net long 15,567 contracts, an increase of 1,557 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 30,195 contracts. This represents a decrease of 6,121 contracts in the net long position held by these traders.

TODAY’S MARKET IDEAS: The bulls have control to start but to add markedly to the impressive initial pulse up in prices might require favorable US numbers, more merger and acquisition news and quiet on the Euro debt front into their close later this morning.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

Global equity markets have taken a negative turn during the initial morning hours, weighed down by a round of soft European economic data. The Japanese Nikkei extended its winning streak with a rally and close back above the 9,000 level. While PMI data out of China showed a level of improvement an unexpected decline in export orders sparked concerns over softening global demand. Global slowdown fears were amplified by German PMI Manufacturing data that fell by more than expected. Manufacturing activity in Europe also slipped for the first time in two years in August. While there seemed to be a level of optimism in the US markets yesterday, an active economic calendar this morning has the potential to bring recession fears back into focus. This also comes at a time when global markets try to handicap the Fed’s next move. There is an active flow of US economic data this morning, with Weekly Jobless Claims expected to show a fractional decline compared to last week. US equity markets will be closely following the results of the August ISM Manufacturing figures that are expected to slip below the 50 level and to show the first decline in two years.

S&P 500: While it seems that the September S&P 500 has begun to take weak economic readings better, they still face the latest bout of data for the month of August. After a bout of sluggish European Manufacturing data this morning, the market faces US Manufacturing PMI figures, which are expected to slip below the 50-level for the first time in 2 years. The soft manufacturing trend from overnight has weighed on commodity markets like crude oil and copper, and that is likely to be a negative for those related shares this morning. While bank stocks were higher in London following reports that the government would hold-off on new regulations until the next election (2015), US markets reacted to a surprise leadership change at the Bank of New York. The September S&P 500 showed positive technical action with its move above 1219.00, but it was unable to close above that level. The early edge goes to the bear camp, with the potential for more downside targeting 1199.80.

DOW: The September E-mini Dow rallied to its best level since August 4th yesterday, which marked an 8-day advance of nearly 1,000 points. The index has come under a level of pressure this morning following a dose of weak economic readings across the Atlantic, and that has tamped down M&A news that IBM was acquiring a Canada-based risk analytics firm for about $400 million. The Dow also seems to be coming to grips with yesterday’s decision by the US Department of Justice to block the merger between AT&T and T-Mobile. The early edge goes to the bear camp, with the potential for a further slide to correct the recent advance. Short term targets on the down side today stand at 11,415.

NASDAQ: The September NASDAQ has come under a modest selling pressure during the early morning hours. This comes in the wake of an impressive 12.1% rally off the August 22nd low that might have gotten ahead of itself in the short term. While the market has gone on to price in the prospects of more stimulus measures from the Fed, yesterday’s round of improved economic data may have detracted from that view. Shares of the NASDAQ are also reacting to reports late Wednesday from Novellus that cut Q3 revenue targets in the wake of continued weakness in PC demand. The early bias in the September NASDAQ is down, with short term support coming in at 2221.00 and 2201.00.

TODAY’S MARKET IDEAS: US equity markets have embraced prospects for more stimulus measures from the Fed and a marginal improvement in yesterday’s economic readings. But improvement in economic data has the potential to sway the Fed to delay pursuing more QE. Soft European economic readings this morning and expectations that data in the US will also be soft provides the bear camp with the early advantage. US equity markets have also become short term overbought and vulnerable to the downside. We see potential for the markets to correct this week’s gains ahead of Friday’s Non-Farm Payroll data, which leaves downside targeting in the September E-mini Dow at 11,450, and 1195.00 in the September S&P 500.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

World equity markets enter the US trading session under pressure, following a Moody’s downgrade of Japan’s sovereign debt rating, weak German confidence readings and uncertainty surrounding the Fed’s next step. Shares of the Japanese Nikkei slipped more than 1.0% overnight on the one-notch downgrade to its credit rating. Market sentiment took another negative blow in the wake of a much weaker than expected German (Ifo) Consumer Confidence reading, which casts doubts of a speedy recovery in the region. The primary equity market focus for the coming days is locked in on Friday’s Jackson Hole meeting. The latest round of disappointing US economic data has provided added hope for more stimulus measures to revive the struggling US economy. For now, it seems that the market expects Fed Chairman Bernanke to introduce some form of help to the market, perhaps extending the duration of debt on its balance sheet, but not necessarily QE3. These hopes are vulnerable to disappointment if the Fed fails to deliver. Economic data this morning includes Durable Goods Orders, which are expected to show a level of improvement in July.

S&P 500: The September S&P 500 rallied as much as 50 points from Monday’s low to the overnight high, but seems to have lost some of that upside momentum. While growing hopes for added support for the US economy from the Fed at Friday’s Jackson Hole gathering provided the early lift, it may take more concrete action to actually inspire a more sustainable rally. Meanwhile, BHP Billiton reported record earnings, nearly a 90% increase in yearly profits and raised their full-year profit outlook above street estimates. The positive results could be offering a level of support under the S&P 500 this morning and that could present a positive for related mining shares within the index. The short term charts turned friendly for the bull camp with yesterday’s upside break action above 1153.00. This leaves the bulls with a slight advantage for more upside today. Downside support comes in at 1140.00.

DOW: The September E-mini Dow established a higher high during the initial morning hours, as it extended late day gains from Tuesday. However, the September E-mini Dow came under selling pressure overnight following more capital funding concerns for Bank of America, with some insiders indicating that the company may need an extra $50 billion in coming weeks to meet new global capital standards. While a number of cyclical and defensive names in the Dow Jones Index garnered support during Tuesday’s session, it might be difficult for the market to attract that support again this morning. There is a shelf of support beneath the market at the 11,020 level. A decline below this level on the downside puts the edge in favor of the bears for a deeper slide targeting 10,860.

NASDAQ: The September NASDAQ broke up out of its recent congestion pattern, but failed to follow through during the overnight and early morning hours. While it is possible that the market is consolidating yesterday’s nearly 4.0% gains, we think that it takes something more definitive to propel tech shares higher. Shares of Micro Technology slipped 1.0% in overnight action, and that may be an indication for more profit-taking ahead after yesterday’s gain. The September NASDAQ has short term support below at 2070.00, with stiff resistance above 2170.00.

TODAY’S MARKET IDEAS: US equity markets showed impressive upside action during Tuesday’s trade, but that was not enough to turn the short term trend in favor of the bulls. Sentiment within the market appears to have priced in a recession and has begun to price in prospects for another form of QE, but it probably takes steady improvement of economic data to offer more upside. This morning’s economic readings on July Durable Goods Orders are expected to improve from their June reading, but more disappointment there could send the major indices in search for the Monday’s lows. Perhaps it takes another test of the August lows before the market can embark on any meaningful rally attempt.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

Global equity markets spent most of the overnight and early morning hours under pressure, as concerns mounted over the Greek debt situation and because of slowing US economic growth. The Japanese Nikkei fell to its lowest level in two months overnight and the Chinese Shanghai index fell to its lowest level since late-January. Global equity markets seem to be factoring in a series of negative fundamentals, including Chinese tightening pressures, the end of the Fed’s QE2 program in June and a lack of fresh earnings news. However, European shares turned into positive territory during the early morning hours, helped by bargain hunting on shares beaten down due to the regions debt situation. Meanwhile, the focus in the US turns to this morning’s April Durable Goods report for another read on the health of the US economy. This follows a disappointing Richmond Fed survey yesterday, which contracted and followed a similar slow-growth theme suggested by last week’s Fed surveys in Philadelphia and Chicago.

S&P 500: During the last 4 sessions the June S&P 500 has made its lows of the session toward the end of the day and finished weak. That downside action in the wake of this morning’s early low and subsequent 8-point bounce might suggest the market could be ready to correct the recent slide. Concerns over slowing US economic growth and a sluggish labor market present the S&P 500 with a negative, but the June S&P 500 could be embarking on an upside attempt to correct the 43 point break from last week’s high. The US Treasury reduced their 96% stake in AIG by selling 200 million shares during yesterday’s offering. News that Chrysler paid back all of its bailout contributions from the US and Canada could be another sentiment booster for US equities. The bears maintain their edge but are being challenged. A little more upside this morning above the 1317.50 level would help tip the scale in favors of the bulls.

DOW: After an early evening sell-off to the lowest level since April 20th, the June E-mini Dow has put up a nice 100 point rally. It seems that the overnight trade was plagued by a number of negative headlines over a potential re-structuring of Greek debt, but there appeared to be a measure of bargain hunting buying as the index challenged downside support levels. It is also possible that a positive earnings report from Costco early this morning may have contributed to the attempt to recover. The short term trend in the June E-mini Dow continues to point down, but a rise back into the prior session’s range this morning could turn the tide in favor of the bulls. A further push this morning above the 12,365 level would open the door for potential move toward 12,450.

NASDAQ: The June NASDAQ traded sharply lower during the overnight session and broke down to a new 5-week low. Prices managed to recover from their worst levels this morning and could be in the process of forming an intermediate term low. Perhaps ideas that US lawmakers could be closer to raising the debt ceiling, after proposing 1-Trillion in budget cuts may be a factor helping to lift sentiment this morning. A move back above 2302.00 that holds today, could provide evidence of a larger upside advance to come. Upside resistance for the June NASDAQ stands at 2311.00 today, and then again up at 2325.00.

TODAY’S MARKET IDEAS: In the face of a number of larger macroeconomic negatives, US equities have managed an impressive rebound from their worst levels. Short term oversold momentum indicators with this morning’s reversal action could be setting the stage for at least a multi-day bounce. Some analysts indicate that the major indices could be reaching fairly valued levels worthy of investment, and that could be a factor that provides an added lift on signs of a turn. Perhaps a favorable read on this morning’s April Durable Goods report could be the bull catalyst. Key upside level in the June S&P come in at 1317.50 and 12,365 in the June E-mini Dow.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

World equity markets are higher to start this morning and have edged back up toward Thursday’s highs. Ideas that Saudi Arabia could boost crude oil supplies to compensate for lost Libyan exports helped to soothe supply disruption fears and push crude oil prices lower late Thursday. The potential easing of supply disruptions fears could be a factor that takes a big unknown out of the market, which would help equities correct this week’s downdraft. Perhaps that uncertainty could be relieved further as the UN Security Council meets today to discuss sanctions against Libya. It seems that the equities want to rally but the uncertainty surrounding the Libyan conflict keeps near term optimism on a leash. Glimmers of bargain hunting have emerged at the same time the market discounts disappointing economic readings. Yesterday’s poor US New Home Sales figures failed to pressure the markets lower, and that might suggest that the market is short term oversold. In the meantime, some agencies within the US Government have begun to make plans ahead of a shut down as Congress hashes out details of the debt limit that is set to expire on March 4th. This morning’s US economic calendar includes a second look at 4th quarter GDP, which is expected to show marginal improvement from the previous read of 3.2% followed by a second look at February US Sentiment.

S&P 500: The March S&P 500 has closed lower during the previous three sessions but positive action early this morning hours bodes well for a bounce higher today. The market received a number of positive earnings results Thursday including: news that General Motors posted their first yearly profit since 2004 and results from Target that showed the company’s profit up over 10.0% on the quarter. Perhaps the positive results from target could indicate a similar reading from JC Penny’s when it reports its quarterly results prior to the Wall Street open. It is possible that financial stocks within the index garner support from positive action in AIG, which reported quarterly results indicating that the company earned over $11 billion in asset sales, which offset a $4 billion charge from its insurance unit. The bulls have the edge to start this morning, with upside potential to 1325.00.

DOW: The March E-Mini Dow appears short term oversold and trying to form a short term base to rebound from. Shares of index component Boeing are up over 4.0% in early morning trade after it was awarded a $30 billion contract from the US Air Force. The March E-mini Dow spent most the overnight session trading above Thursday’s mid-range level and appears to be gearing up for a bounce higher. The E-Mini Dow flirts with short term resistance at the 12,100 to 12,124 level with penetration above setting the stage for a push to 12,250.

NASDAQ: The March NASDAQ managed to rebound from trend line support at 2275.00 and appeared to lead the other major US indices higher yesterday afternoon. It is possible that the positive earnings and upside performance from Pricline.com yesterday added to the late day rally. Meanwhile, there appears to be some dissent among the members of Apple’s board over how to handle a successor to Steve Jobs handling, and that could become a factor that grabs the markets attention in the days ahead. The bull camp has the short term edge this morning, with near term targeting coming in at 2340.00.

TODAY’S MARKET IDEAS: The markets look poised for a rally day today to correct this weeks downdraft. This leaves a short term positive outlook that could present a buying opportunity for short term traders, with upside targets coming in at 12,250 in the E-mini Dow and 1325.00 in the March S&P 500. Taking a more intermediate look after this week’s decline leaves the bear camp with an opportunity to sell a rebound higher in the major US indices to position for another downdraft to follow.

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

Several market measures forged significant gap up action in the early Monday trade and that action seems to be primarily the result of the Irish bailout package. It is also possible that the markets are getting some lift from favorable employment stories, which showed job gains in the 4 biggest US states last month. It is also possible that a consistent decline in ongoing claims data is another issue that is giving the market some lift residual. With the official kick off of the holiday shopping season directly ahead and stories of good early traffic being noted, it is also possible that the hope for favorable sales is serving to lift share prices. With high risk junk bonds garnering increased interest, over safe haven government bonds recently, some might even suggest that overall investment sentiment is improving.

S&P 500: While the December S&P managed a gap up trade this morning and in turn reached the highest level since November 12th, the market has initially fallen back rather significantly from its initial highs. Therefore, the markets seem to be emboldened by the Irish bailout news and perhaps because of generally favorable US economic expectations. In addition to generally favorable economic views, the markets are also expecting to see favorable scheduled data flows. However, countervailing the mostly positive tilt this morning are indications that the SEC is poised to press forward with a large insider trading case. The Commitments of Traders Futures and Options report as of November 16th for S&P 500 Stock Index showed Non-Commercial traders were net long 30,575 contracts, a decrease of 7,885 contracts. The Commercial traders were net short 71,801 contracts, an increase of 4,990 contracts. The Non-reportable traders were net long 41,227 contracts, an increase of 12,875 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 71,802 contracts. A decline back below the bottom of the gap area at 1200 could shift sentiment from positive to negative.

DOW: The December mini Dow has managed a sharp gap up trade in the early action today and in the process the index reached the highest level since November 15th. The Mini Dow might be benefiting from a favorable response to the largest Australian IPO offering in 13 years overnight and the market is also probably drafting off the news of an Irish aid package, as well as a rise in European stocks. Some in the trade are also expecting to see somewhat supportive economic data from the US this week and that could feed into the initial positive bias that is present today. The Commitments of Traders Futures and Options report as of November 16th for Dow Jones Index $5 showed Non-Commercial traders were net long 23,276 contracts, a decrease of 8,410 contracts. The Commercial traders were net short 26,620 contracts, a decrease of 8,289 contracts. The Non-reportable traders were net long 3,344 contracts, an increase of 122 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 26,620 contracts.

NASDAQ: The December Nasdaq also managed a gap up trade but the reaction only took prices back up to last Thursday’s high. The tech sector did see some strength in Chip shares at the end of last week, but that hasn’t been enough to put the Nasdaq back into a solid leadership role. Perhaps some tech sector investors are still fearful that the debate over QE2 will surface again, especially if Fed buying of Treasuries this week is unable to lift or sustain Treasury prices in the face of auction supply from the Treasury. The Commitments of Traders Futures and Options report as of November 16th for Nasdaq Mini showed Non-Commercial traders were net long 51,327 contracts, an increase of 10,145 contracts. The Commercial traders were net short 53,352 contracts, a decrease of 2,457 contracts. The Non-reportable traders were net long 2,025 contracts, a decrease of 12,603 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 53,352 contracts. Critical support and the bottom of the gap area this morning is seen at 2139.00.

TODAY’S MARKET IDEAS: The market has set a tall hurdle with a very impressive opening gap today and that means the bulls will need to see a positive tone from US data and holiday sales dialogue just to keep the bullish vibe rolling. In conclusion, we think the market needs some break through news on the tax cut extension front or some fresh merger and buy out news to best the initial probe higher today.