Monday, September 6, 2010 - Weekly e-Newsletter & Commentary - Issue No. 423

Economic Calendar

Date	ET	Release	For	Consensus	Prior
Sep 08	10:30	Crude Inventories	09/04	NA	3.42M
Sep 08	14:00	Fed's Beige Book	Sep	NA	NA
Sep 08	15:00	Consumer Credit	Jul	NA	-$1.3B
Sep 09	08:30	Initial Claims	09/04	NA	472K
Sep 09	08:30	Continuing Claims	08/28	NA	4456K
Sep 09	08:30	Trade Balance	Jul	-$48.3B	-$49.9B
Sep 10	10:00	Wholesale Inventories	Jul	NA	0.1%

View Our Complete Economic Calendar

Emini Commentary

Andrey Korchnoy, Sr. Systems Analyst

U.S. stocks rose, snapping three weeks of declines, as better-than-estimated growth in private employment and manufacturing raised optimism the economy will avoid a recession. The S&P 500 advanced 3.8 percent to 1,104.51, the biggest weekly gain since the period that ended July 9. The Dow Jones Industrial Average gained 297.28 points, or 2.9 percent, to 10,447.93, after losing 4.7 percent in the previous three weeks.

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Gold Commentary

Trenton Kimminau, Futures and Forex Broker

Gold futures gained $10.30 per ounce last week before the long weekend. We saw some volatile price action the last day of the week with the Department of Labor monthly Non-Farm payrolls coming out. December Gold futures hit a high at 1255.6 during electronic trading overnight. Prior to the employment report in the morning, prices hit a low at 1239.2. After the numbers were released, prices found support to close at 1248.2. Analysts have attributed most of the sell-off to profit taking ahead of the payroll numbers. The market bounced back after the non-farm numbers were better than expected. The Labor Department reported that 54,000 jobs were lost instead of the 105,000 that had been expected.

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Currency Commentary

Andrey Korchnoy, Sr. Systems Analyst

The euro was near a more than two- week high against the dollar before reports this week that economists say will show the recovery is gaining strength in Germany, Europe’s largest economy. The yen fell versus higher-yielding currencies as the Bank of Japan started a two- day meeting today at which policy makers may reaffirm their willingness to take more credit-easing measures. U.K. factory production grew at a record pace in the third quarter on surging export demand, that pushed also pound higher against dollar and other currencies.

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Tbond Commentary

Brian Heyliger, Professional Trader/Instructor

A theme you’ve noticed from me in the passing weeks is this: I’m bearish on bonds! Specifically the 30-year U.S. Government “long bond,” (ZB 12-10). Our day finally came.

I won’t bore you with the horrible fundamental situation. We all know unemployment is over 9% (so they say), deficits are exceeding 90% of GDP, or the fact that the U.S. Government is using it’s “credit card” like a punch drunk teenager with no credit limit. I’m sure you’ve heard that part already.

The fact is, U.S. Treasuries were the most overbought they’ve been all year. And as a result, reality is setting in, as the bulls are surrendering this market to the bears.
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Crude Oil Commentary

Andrey Korchnoy, Sr. Systems Analyst

Oil fell for a second day in New York on speculation fuel demand will decline as the U.S. summer peak consumption season ends and amid concern the global economy will be slow in recovering. Crude for October delivery fell as much as 51 cents, or 0.7 percent, to $74.09 a barrel in electronic trading on the New York Mercantile Exchange. It was at $74.17 at 9:19 a.m. London time. There will be no floor trading on the Nymex today because of the U.S. holiday. All electronic trades will count as part of tomorrow’s session.

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Forex Commentary

Josh Lampel, Futures/Forex Broker

Euro at the Crossroads. The euro has extended its two day advance against the greenback; however price action looks to be capped by the 20-day moving average. Recently, the pair broke below both the broader and narrow ranges, in which I token advantage of by shorting at 1.3100. I will remain short the pair going into tomorrow’s NFP report as the 20-day SMA now looks poised to crossover below the 50-day moving average.

British Pound. After reaching the highest level since February, the GBPUSD has worked its way into a tight descending channel which has remained intact since the beginning of August. So long as the pair can continue its trend or break below the range, my short position from 1.54469 will survive. In my view, the break below the ascending trend line two weeks ago still validates further downside risks.
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