Peanut Princess Trading Nymph looking at Next Week, Euro Trash?

Well, Congress is coming back and we will be all watching the Euro and Sterling this week, it’s a light week so we will see if the Bulls can hold the Market above SPX 1070 and maybe even push it up to 1140? OK I am done laughing. Yet, all of it will be dependent on whether the Euro/USD can get back to it’s support of its all time 50% level of 1.2134 while both the ECB and Bank of England meet this week.
This week we also get the “Trade Balances from around the World” and we will watch to see if our bond auctions will still remain strong.

Also for a possible trade, for some strange reason, Gold seems to like to rally before the ECB and BoE meetings so you may want to watch that. For Company Earnings, it is again a very light in the number of companies reporting.

Monday
In the early morning we will have the European Monetary Union Senix Investor Confidence Number, that is a survey of Investor sentiment that is calculated by the Number of Bulls minus the number of bears divided by the total number of votes. Because the Eur/USD is so close to that key support all European data needs to be watched close this week.
During the USA markets at 3:00pm est. we will get the monthly Consumer Credit Data, the Fed releases the dollar value of consumer installment credit outstanding which can give us insight into the consumer. After the close we will get the Earnings of PBY support at 9.62ish with resistance at 13.37ish and FCEL has support at 2.00 and resistance at 2.74 but this is testing it’s all time lows.

Tuesday
In the early Morning we get Japan’s and Germany’s Trade Balance Numbers which is a measure of balance amount between import and exports. We also get the Germany Industrial Production Data. This is released by the Federal Ministry of Economics and Technology and measures the outputs of the German Factories and Mines.

Before the Bell, in the US, we get the earnings of DG which has support at about 29.50ish and has a chart that could get ugly real fast if it starts to roll, resistance is all time high and TLB has support at 13.45ish and resistance at 15.86ish . During the trading session, the House-Senate Conference Committee that was created to resolve the differences between the Financial Regulatory Reform Bills may have the House conferees appointments per Barney Frank’s proposed timeline.
At 1pm est. we will have the 3 year Note Auction, which last month we got a bid to cover at 3.27 and yield 1.414%, Buyside demand was solid with direct and indirect bidders taking down a combined 66 percent of the auction vs. a 63 percent average. Last month’s auction was very strong. After the close we will get TTWO earnings with support about 9.80ish and very strong resistance at 13.99.

Wednesday
Continuing our theme, we get the UK trade balance. We also get insight into the economy of Australia when the University of Melbourne, releases the Westpac Consumer Confidence data and the National Australia Bank releases Business Confidence data on the current business conditions there.
In the US Session, the conference committee on Financial Regulations has its first open meeting of the conference with organizational issues and opening statements on the agenda.
There is also the 10 Year Note Auction which last month’s auction had a bid to cover at 2.96, with high yield of 3.548%. Direct bidding was 25% and indirect bidding at 42%. This made it a combined 67% non-dealer takedown and far above the 52 percent average.

The Fed Beige Book in the afternoon comes out. It reports on the current US economic conditions thru surveys by business, economist, and other sources by the 12 Federal Reserve Districts will be released. After the bell we get earnings from CIEN has key support at 15 and under at 13.29, resistance is about 18.50 and PNY which has support at 25 and 24 with Very strong resistance at 26.19.

Thursday
The Royal Bank of New Zealand Interest Rate decision, analysts are estimating an increase of .25 points. Japan will release GDP data. Australia Bureau of Statistics will give Australian’s version of our Non Farm Payroll data when they release their report on employment in Australia. For China we continue our Trade Balance theme from getting their Trade Balance Data with export and import data. In addition, we get Money Supply and also May new loans from them. This may be closely watched to determine the extent of a slowdown that China has been experiencing.
Then the moment of truth, we get the European Central Bank and Bank of England Rate Decisions. The ECB is not expected to raise rates at this meeting. Everyone will be watching the Market’s reaction to ECB President Jean-Claude Trichet’s Press conference. He needs to enforce Market confidence. The Bank of England is also not expected to raise rates at this meeting but it is dealing with the issue that its economy is slowing while its inflation rose to 3.7% which is above the BoE 2% target. Watch closely the Eur/USD on that key 50% level of 1.2134 and see if there is any chance to get back to retest it.
For the USA market, before the bell we get earnings from APWR which is a falling knife with no major support until 3.00 and major resistance at 9.00 and LULU with key support at 38.86 and resistance at 48.43. We also release our own Trade Balance Data. In addition, the Semiconductor Industry Association should release its mid-year forecast for Chip Sales.
At 1pm est. we have the 30 year Bond Auction. Last month it was weak, the bid to cover was the lowest of 2010 at 2.60. Yield was 4.490%. Direct Bidders at 22% and indirect bidders at a weak 33%, taking down 55% of the Auction.

Friday
In the early morning, we get the UK Producers Price Index data which will be watched close due to the rise in inflation there, it is released by the UK National Statistics Office, we may also get China’s PPI numbers, Fixed Asset Investment data, May Retail Sales, and May Industrial Output. The USA market gives us Retail sales by the US Census Bureau which measures the total receipts of Retail Stores and gives us an indication if consumers are spending.
So in conclusion, watch the euro and think about buying GLD if it can stay over support of 119.55ish.

Good Morning Everyone. I thought I would share my Fibo limits intraday of the SPX for 6/3/2010. I watch other Fibo indicators thru out the day…but this is my basic levels, if the Market level leaves those levels intraday it’s a sign of panic or greed. This is what I call Daily Fibo ala Nymph System.
1117.55 685%
1110.32
1105.79 261%
1103.01 161%

1101.29 100%
1100.60 78.8%
1100.23 61.8%
1099.90 50%

1099.57 38.2%
1099.20 23.6%
1098.51 0%
1097.82
1097.45

1097.12
1096.79
1096.42
1095.73 100%

1094.01 161%

1091.23 261%
1086.70
1079.47

Today, we had a rally…and everyone went out and bought the global growth stocks, be it Oil, Materials, etc,
The Euro/JPY was in rally mode and the “Risk On” play was all the rage. So the question comes up, is this rally going to last for more than a day or two?
Well, as I am still trying to figure out The PPT system, I will revert over to my style of Analysis. First, what the heck did Copper do today? Well, US Copper Futures ended down but bounced back above $3.00 a pound after a 12 day low. Last night the Shanghai Copper Futures sold off hard. Tonight they are up, but only by a 1/3 of what they lost yesterday. It appears that even if we got a relief rally to retest the $3.00 support, Copper is still having a greater focus on the fact that China won’t be building like crazy…not that many High End Apartments or Shanghai Expo Parks needing to be built this year. Weak Dr. Copper spells weaker Market. As, I heard last night, all Bull Markets have a Copper Roof.
Second, Iron Ore, VALE’s executive director on Tuesday indicated that they were going to push the upcoming third quarters price for iron Ore up, they saw the huge rally up in the Spot Ore, The Chinese Steel Mills now are paying a lower amount, they did the math and want more.
If you don’t follow the Spot Iron Ore out of China and India, it was in a crazy rally up where prices seemed to go up about 2% everyday. But, recently it has been in freefall. Last Night talk brought out some “Dealers” and the price for spot did move up about 1%, but it was not the Steel Mills buying, only Traders hoping for a bottom if China goes all 2009 on the Ore Miners and refuses to pay up. With Rebar still falling on the futures (yet up a small bit tonight)and Chinese Steel Production prices cut for June, the dealers buying last night on speculation could get hurt, we will watch. I believe that Chinese Customers have a formula that was agreed on with the contract, so it may be a non issue anyway, well at least until July. Plus, Rubber is still falling on the Shanghai Futures as a slowdown in China’s car sales is bothering it…which also doesn’t help steel.

Third, the Euro/JPY and USD/JPY crosses. Last night the Japanese Prime Minister announced he was stepping down. The surprise news had everyone selling the Yen, this set off a short squeeze because everyone has been selling the USD/JPY for awhile. Right now the USD/JPY is at 92.19ihs and the Euro/JPY is holding around 113 with 113.50 being toppy point. We will just have to sit and wait to see if the dealers really want to go long Euros and the OZ at this point and continue to sell the Yen. My own gut feeling is that the Prime Minister story was just a bit of a surprise, and even with that event the Euro/JPY is having a hard time staying over 113. The Mining tax in Australia, is off, and then it is on, then it is off…just getting bored with that.

Last, we continue to play the “what will the Non Farm Payroll be” which I discussed in last week’s post in the Peanut Gallery. Today’s, Challenger Jobs Report had a good headline and everyone including Obama is already pricing in a very good Jobs number. Yet, on Friday if we get a good number and Japan has settled down then, believe it or not, we could actually sell off on the news. In the past, I have seen the USD bought on the data, stronger dollar can trigger the program trades to sell the market. So, the market may actually move down even on a good number and of course the market will probably sell off on a bad number or even at this point an In-Line number at this moment.
Also, I know this is a bit bearish, but I am really kind of concerned about the last part of the Challenger Report, the Press Release is posted below, do you see the trend on Government workers being laid off? These are normally higher end workers that will be coming into the labor market. This could be a growing trend that really could cause some ugly ripples and make Mr. Devil Dog one happy guy….knock, knock.
My conclusion, like I said last week, we have an upside bias this week with support about 1072 and resistance around 1040ish. But, next week Congress comes back from vacation so I would not get use to a Summer Rally.

Job-Cut Announcements Remain Flat in May
EMPLOYERS ANNOUNCE 38,180 CUTS AS SUMMER SLOWDOWN APPROACHES

CHICAGO, June 2, 2010 – The pace of downsizing was virtually unchanged in May, as employers announced plans to cut 38,810 jobs from their payrolls during the month. That was slightly (1.3 percent) more than the four-year low of 38,326 job cuts announced in April, according to the latest job-cut report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
May layoffs were 65 percent lower than the same month a year ago, when planned job cuts totaled 111,182. This marks the 12th consecutive month in which the job-cut total was lower than the comparable year-ago figure. It also marks the 12th consecutive month that saw fewer than 100,000 announced job cuts.
Through the first five months of 2010, planned layoffs announced by employers totaled 258,319, which is 69 percent fewer than the 822,282 announced during the same period last year.
“Announced job cuts have, for all intents and purposes, returned to pre-recession levels. What makes the low job-cut totals we have seen this spring particularly remarkable is that we still have not reached what is the slowest downsizing period of the year, which typically occurs during the summer months,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.
“It is difficult to imagine the pace of downsizing slowing even further, considering that the economy, while recovering, is still in a relatively fragile state. However, monthly job cuts may indeed continue to fall during the summer, when many businesses hold off on making dramatic staffing changes,” he added.
The one area of the economy that may not follow the typical pattern of a summer slowdown is the government and non-profit sector, which announced 16,697 job cuts in May, 12 percent more than April’s 14,973. May job cuts brought the year-to-date total for the struggling sector to 93,470, which is more than two-and-a-half times more than the second-ranked pharmaceutical industry’s 34,157 job cuts this year.
“Unlike the private sector, which is beginning to see the fruits of recovery, the budget crisis for many states and municipalities is only getting worse. High unemployment and falling home ownership are taking a significant toll on tax revenues. And, with many states in an election year, politicians are reluctant to raise income taxes and sales taxes, so as not to punish voters. However, this leaves them with no other choice but to make drastic cuts in public programs and the jobs that go with them,” said Challenger.

Normally, the Semiconductor Industry Association releases their Chip Sales on the First Monday of the Month with the people that actually pay for the subscription getting to see it the day before. But No, because of the Holiday it is out to the public today. If you have not read it, the Press Release is down below. Remember this is April’s numbers, so knowing what happened in May to China and Europe this imho could be coming to an end of another Semiconductor Cycle. June 10th as you can see below will be the Mid Year Forecast which could be very interesting? As we all know, the semiconductor industry is highly cyclical. During periods of favorable market conditions, like our crazy Grass Shoots of 2009, semiconductor manufacturers often begin building new stuff fast in response to anticipated demand growth for semiconductors. As a result, large amounts of semiconductor manufacturing capacity typically become available at the same time. If this anticipated growth doesn’t come, this increase in supply often results in semiconductor manufacturing overcapacity. Which of course is so what happened in 1999/2000. So has the Industry partying like 1999….will we be singing “Party like 2..0..0..9 soon?

SEMICONDUCTOR INDUSTRY ASSOCIATION
REPORTS APRIL CHIP SALES GREW BY 2.2 PERCENT MONTH-ON-MONTH

SAN JOSE, CA – June 1, 2010 – The Semiconductor Industry Association (SIA) today reported that worldwide semiconductor sales in April were $23.6 billion, an increase of 2.2 percent from March when sales were $23.1 billion. Sales increased by 50.4 percent from April 2009 when sales were $15.7 billion. Sales for the first four months of 2010 were $92.6 billion compared to $60.1 billion for the like period of 2009, an increase of 54.2 percent. All monthly sales numbers represent a three-month moving average.

“Global sales of semiconductors grew at a healthy rate in April, surpassing the previous monthly record level of November 2007,” said SIA President George Scalise. “As expected, both the year-on-year and sequential growth rates moderated slightly. The unusually high year-on-year comparison is a reflection of the trough of the recession in early 2009 compared to strong demand today.

“Important contributors to current growth of semiconductor sales include the worldwide adoption of 3G wireless communications and consequent investment in infrastructure and recovery of demand from the enterprise, automotive, and industrial sectors.

“Going forward, we expect semiconductor sales will return to historical seasonal patterns. Future growth of the industry remains heavily dependent on the continued global economic recovery, and in particular, on continued growth in the developing markets that are the largest demand drivers for our products,” Scalise concluded.

SIA will release its mid-year forecast on June 10.