Trade Crude Oil

S&P 500 Pivots

Today ends the first quarter of 2010 with a short trading week due to Good Friday.

Yesterday we mentioned that the S&P 500 is reaching new highs not seen since September 2008 however it is encountering resistance.  The S&P 500 reached an intraday high of 1178 and intraday low of 1169. We have discussed that the 1168 is a major support level due to the convergence of various Fibonacci levels on March 25th. Today’s primary pivot is 1173.34 so expect the market to go higher if it trades above between 1172 and 1174 levels and find support between 1167 and 1168.

Forex Analysis: Dollar Vs Euro

Euro fell against the dollar as concerns about debt problems and expectations of Europe’s recovery will lag behind the US. Last week the euro pushed lower due to Fitch downgrading Portugal’s credit rating and Greece was seeking the aid of the International Monetary Fund, which didn’t have a rescue plan in place to solve the debt crisis.

Barrons mentions that Fed reaffirmed short-term interest rates will be low however it cannot control long term interest rates. 10-year Treasury notes have increased 20% from 3.23% last November to 3.87% current. This may encourage other traders and investors to put their money into the dollar.

Wednesday Economic Numbers

March Consumer Confidence

March consumer confidence index rose 52.5 however shows little change when compared with the 4-month moving average of 51.8. February consumer confidence fell 10 points to 46.0. Overall consumer confidence remains relatively weak. Consumer confidence drives 2/3 of the economy so a higher index would mean improving economic growth. A declining consumer confidence index means slowing economic growth including jobs and income.

February Factory orders

January factor orders rose 1.7 percent. Factory orders represent the dollar volume of new orders, shipments, unfilled orders, and inventories reported by domestic manufacturers.  Giving a comprehensive look at the manufacturing sector, new orders can act as a gauge of demand while shipments indicate supply. Higher shipments could signal excess demand relative to supply and high inventories signal excess supply over demand. Unfilled orders represent pending goods that may be shipped. Higher unfilled orders signal excess demand over supply.

Mortgage Applications

Last week mortgage applications rose 2.7% reversing last week’s 1.9% decline. The weekly Mortgage Bankers’ Association Purchase Applications is a leading indicator for single-family home sales and housing construction. Mortgage rates rose in the past week to 4.93% for a 30-year fixed so this will have an effect on the housing market going into April. Equities to watch on these numbers include: Home builders, mortgage lenders, and home furnishings companies.

Petroleum Report

Last week crude oil inventories rose for the eighth straight sessions up 7.3 million barrels. The OPEC cartel announced that it will keep oil output ceiling unchanged as it will keep its profit from the falling dollar. Oil is currently trading between the $80 and $82 range and the price of oil has not fluctuated greatly reinforcing OPEC’s decision to keep the output the same.

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