Dartline™ First Look – morning directional planner

December 21, 2009, 7:00 am … The Standard & Poor’s 500 index futures up 1.40 10 1095.40, while trading should be light during the Christmas holiday-shortened week, but that can add to volatility. Markets will be closed Friday. However, trading is likely to be light during the Christmas holiday-shortened week, but that can add to volatility. Markets will be closed Friday. However, economic data throughout the week will keep traders on their toes. The government on Tuesday releases its final report on third-quarter gross domestic product, which measures the total economic output of the country. Economists polled by Dartline predict third-quarter growth was unchanged at an annual rate of 2.8 percent. Data on existing and new home sales are also due out later in the week. Both reports are expected to show sales rose about 2 percent in November. A recovery in the housing market is considered vital to foster a recovery because a collapse in sales and prices coupled with mounting mortgage defaults helped throw the nation’s economy into recession. Orders to U.S. factories for big-ticket manufactured goods likely rebounded in November. Orders for durable goods that are expected to last more than three years likely rose 0.5 percent in November, after a 0.6 percent drop a month earlier. The report is due out Thursday. …Overseas, Japan’s Nikkei stock average rose 0.4 percent. Britain’s FTSE 100 rose 0.9 percent, Germany’s DAX index gained 0.7 percent, and France’s CAC-40 rose 0.7 percent. … China’s government is targeting 8 percent growth next year as the global economy recovers, the country’s industry minister said Monday. “Based on the economic growth target of about 8 percent, set by the central government, we aim for industrial output growth at about 11 percent,” said Li Yizhong in a webcast on his ministry’s site. Li’s comment was the first indication of Beijing’s 2010 growth target, a figure that usually is released after the start of the year. The annual target has been set at 8 percent for several years, though growth has exceeded that. Forecasts by private sector economists for China’s economic growth next year range from 9 to 11.9 percent, well above the government target. China’s economy expanded 7.7 percent for the first nine months this year, helped by the government’s 4 trillion yuan ($586 billion) stimulus package. A government report this month said full-year growth is forecast at 8.3 percent. The World Bank is forecasting 8.4 percent. Li said the world’s economic recovery is still fragile and Chinese exports this year should be 17 percent below 2008 levels. China’s leaders vowed at an annual planning meeting this month to keep economic stimulus and easy credit policies in place. China’s industrial production in the first 11 months of this year rose 10.3 percent from the same period last year. Growth in November alone was 19.2 percent over a year earlier. What China decides, Asia follows. … Meanwhile, bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.58 percent from 3.54 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.03 percent. The dollar was mixed against other major currencies, while gold prices rose slightly. … Benchmark crude for January delivery was down 19 cents to $73.17 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The January contract, which expires later on Monday, rose 71 cents to settle at $73.36 on Friday. In London, Brent crude for February delivery rose 22 cents to $73.97 on the ICE Futures exchange Values are ahead of an OPEC meeting where investors expect the cartel to keep production levels unchanged. Leaders of the Organization of Petroleum Exporting Countries have signaled in recent weeks the group doesn’t plan to change output levels at its meeting Tuesday in Luanda, Angola. “The market would be surprised if there was any change to output,” said Clarence Chu, a trader with Hudson Capital Energy in Singapore. “At near $75, the price is high enough to fund governments and investment, but not so high it damages the global economic recovery.” Iraq took back a remote oil well from Iranian forces over the weekend, a confrontation that briefly sent oil prices higher Friday on investor concerns about a wider conflict. …  Use 1,114.11 in the Standard & Poor’s 500 index as primary indicator for direction. Considering that the index set a new low for the week and ended the week in the red in the wake of Wednesday’s rejection from the range top, damage was limited within the five week trading range suggests more of the same. Maintain  short support at 1094.35, which will be tested this day. Trade the noise and relax — for now allow the events to come to you.