S&P 500 Pivots
We mentioned yesterday that there will be resistance around Tuesday’s previous high of 1192. The S&P 500 only reached a high of 1190 before being consumed with the consumer credit report declining $11.5 billion in February. The S&P 500 settled at 1182 level after it fell to a low of 1177 breaking last Thursday’s previous high of 1181.
Thursday’s primary pivot is 1183.10, which is Tuesday’s previous low. If the S&P 500 trades below this level then expect the market to go lower. The next support level is the 1178 level, which is the 8 exponential moving average on the daily chart. The resistance level is between the 1184 and 1185 pivots consisting of the 55, 144, 200 exponential moving averages on the 5 minute chart.
Summary of pivot levels:
1190: Wednesday’s previous high
1188: Wednesday’s primary pivot
1187: Monday’s previous high
1184 - 1186: 55, 144 and 200 Fibonacci moving averages on 5 min chart
1183: Tuesday’s previous low and Thursday’s primary pivot level
1181: Last Thursday’s previous high
1178: 8 Fibonacci moving average on the daily chart
Commodities Analysis: Gold and Crude
Gold gain $14 to 1150 as gold imports are up in India ahead of the one million weddings planned between April and May. On the daily chart gold has been trending sideways since it reached a high of 1220 back in early December 2009. A trading strategy for gold includes buying calls on SPDR Gold Trust (ETF: GLD).
Crude oil fell $1.12 to $85.72. The dollar lost ground played apart in pushing the commodities sector higher however yesterday the dollar gained against the euro. If the dollar continues to trend higher against the euro then expect prices in crude oil to fall. On the 60 day chart crude oil looks to be tipping over as traders are expected to take profits.
Previously the OPEC cartel announced that it will keep oil output ceiling unchanged as it will keep its profit from the falling dollar. Oil was currently trading sideways between the $80 and $81 however it has regained its footing reinforcing OPEC's decision of keeping oil output the same.
Forex Analysis: Dollar Vs Euro
As the Euro trends lower against the dollar there is now a possibility that the Fed may raise interest rates to ward off inflation.
GE is investing 340 million Euros ($460 million) to expand European wind operations. Companies buying into foreign currencies for purchases and investing increase the demand towards that country’s currency. However the Euro gains are being cut short as
Thursday Economic Numbers
Jobless Claims
Last week showed positive signs in the labor market as jobless claims fell to 439k for the March 27 week. Last week CareerBuilder.com provided a sense of optimism as the number of job listings increased.
The 4 week moving average gives a better perspective than the weekly report. Previously the 4 week moving average fell to 447,250 down 20,000 from February, which is the lowest since late 2008.
Natural Gas Report
Last week the natural gas reported a rose slightly higher-than-expected 12 billion cubic feet for the March 26 week. Growing economic activity usually would higher the demand for natural gas.
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