Dartline™ First Look – morning directional planner

November 23, 2009, 7:00 am … The Standard & Poor’s 500 index futures up 11.70  (1.3%) to 1101.79, as France’s CAC-40 was up 1.2 percent, Britain’s FTSE 100 up 1.4 percent and Germany’s DAX up 1.3 percent. Trading in Asia was subdued with financial markets in Japan closed for a national holiday. Hong Kong’s Hang Seng index gained 315.55, or 1.4 percent, to 22,771.39 while South Korea’s Kospi fell 1.55, or 0.1 percent, to 1,619.05. Australia’s index gained 0.7 percent and China’s Shanghai benchmark rose 0.9 percent. Markets were lower in Indonesia, Malaysia, Thailand, New Zealand and the Philippines. Apparently, traders are not cautious ahead of U.S. revised GDP growth for the third quarter. Dartline expect the initial estimate of a 3.5 percent annual growth rate to be lowered. Also due this week are reports on home sales, unemployment, consumer confidence and demand for big-ticket manufactured goods. The U.S. consumer remains the wild card, while the U.S. dollar based carry trade  is the BIG STICK to keep the global stocks moving higher.

A report expected at 10 a.m. EST. should show existing home sales rose 1.4 percent in October as first-time homebuyers rushed to try and close purchases before a tax credit was set to expire. The credit, which was due to end at the end of the month, was subsequently extended into 2010. The National Association of Realtors is expected to report sales rose to a seasonally adjusted annual rate of 5.65 million, up from 5.57 million in September. The collapse of the housing market helped push the economy into recession. Data on sales, prices and mortgage delinquencies continues to show a recovery in the sector remains choppy. … Benchmark crude for January delivery was up 97 cents to $78.44 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 26 cents to settle at $77.20 on Friday. Iran on Sunday began large-scale air defense war games aimed at protecting its nuclear facilities from attack as an air force commander boasted the country could deter any military strike by Israel, state television reported. Indeed, military exercises boosted tensions in the Middle East, but will not affect supplies. Crude also rose on a weaker dollar as investors bought commodities as a hedge against inflation. The euro rose to $1.4978 in Asian trading from $1.4859 on Friday. … Bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.38 percent from 3.37 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent. … Commodities were mostly higher last week, but the moves were not purely dollar-driven like in recent weeks. Precious metals ended the week higher despite strength in the US Dollar Index, energy was only slightly higher, while agriculture commodities were mixed. Gold hit news highs again, touching $1153.50, but silver put in the best performance this week in the commodity complex with gains of $6.4%. Look for more of the same. … Standard & Poor’s 500 index futures starts above 1100, which suggests near term test to support at 1081.10 not likely. Therefore, the up-move since March should last to year end, and confirm that this is not just a bear market rally. Since fundamentals are still lacking and the economic data appears misplaced and manipulated, it would be prudent to reduce laggards, take profits, while trading both sides with a long bias.