BGC Chart Chatter US Technical Brief….Nov 11, 2011

News wise, Italy's Senate approved a debt-reduction package shores up confidence, at least for today. Additional tail winds from China bank loan news, corporate earnings (media space DIS) and CAT buying ERA Mining Machinery Ltd. to expand sales in China. Michigan Sentiment caps news flow for the morning session. Trade remains on pins –needles on high alert from late surprise comments out of the Eurozone.

Key equity index chart bend but are not broken as supports are held. SP 500 daily chart morphing into wedge pattern defined by lower high / higher low. A measure of divergence between Nasdaq 100 futures and SP 500 futures, below yesterday's high against an early break above yesterday's high. Daily chart technical conditions in DAX / CAC and FTSE currently neutral awaiting resolution. ND 100 futures daily chart is standing out with an head shoulder formation as intermediate term resistance at 2405-2415 has been standing out since February. We continue to view an overbought McClellan's Summation Index Indicator raises technical caution flags (chart below).

Market on open buy imbalance set the tone for the morning session provide a steady stair step up pattern

$ 1,086.24 M / -39.09 M ——————————————————————————–
Oil / Gas           : $  157.94 M
Basic Materials     : $  108.31 M
Industrials         : $  154.54 M
Consumer Goods      : $   90.20 M
Healthcare          : $   84.84 M
Consumer Services   : $  101.42 M
Telecommunications  : $   28.08 M
Utilities           : $   42.89 M
Financials          : $  221.03 M
Technology          : $   58.05 M

SP 500 Futures 5 min Chart surges following Italian vote….stair step higher finds sellers from 1264-1265 (long wicked sell candle)

Quick Look….supports defended turns attention towards resistance

Copper (339.45 last): short term momentum loss but avoiding a continuation with hold above 329.00. Break below sets up retest of series of lows and grouped support from 318.00 to 307.00. Moving averages provide scaled up resistance from 345.00 to 359.00. The top of the immediate range is 367.00.

Gold (1769.00 last): higher lows forming in last 2 overnights 1736.60-1745.00, has tended to be a bullish set up in the past. First resistance grouping at 1782.00 for momentum repair with continuations at 1790, 1798, with next strong at 1808-1810. Momentum loss would need close below 1755.00.

Crude Oil (98.62 last): extension pattern has the top of the daily chart model's range at 99.30 / weekly also converges at 99.20. Grouped support concentrations at 94.90, 93.60 and 92.30

ND 100 Futures (2343 last): Pattern alert subsiding with too many tests (5) of supports from 2284 to 2264. Working closing resistance at 2378 with major above  2413-2416. Working on momentum loss below 2348. Bull flag now taking over

DJ Industrials (12119 last): Pattern Alert: morphing into constricting wedge – lower high / higher low. Closing focus: 12150 for upside break. 12220 for acceleration. Short term moving averages beginning to unwind to the upside reform support at 11980-11950. Momentum loss below 11920, higher low trend line 11770   

DJ Transportation Index (4970 last): Pattern Alert: Pipe top pattern appears to be holding as range top maintained at 4950- 5040 (where the flat 200/233 day SMAs reside). Momentum loss on close below 4780 to begin technical damage to up leg from October and to confirm

Italian 10-yr yields (6.48% last from  7.25% last from 6.87% high): The top of the current weekly chart range at 7.25% is left intact. The overshoot fell against the next definable ledge at 7.56%. Pushing through supports at 6.94%, 6.76%, with 6.64%. The next ledge of grouped supports at 6.28% was last week's acceleration point.  

Frankfurt DAX (6059 last): daily charts bend but have not been fully broken with grouped support at 5700 still holding. Closing resistance to regain footing is 6080. The top of the current range is 6260-6370.

Paris CAC (3150 last): daily charts remain in a messy configurations. Our bearish reversal at 2980 is still left unscathed. Technical repair signal would need a close above 3250

London FTSE 100 (5539 last): Pattern Alert: a pipe top pattern appears to be in play. Leaves closed the top of the range remains 5730. Immediate resist at 5630 to regain solid technical footing. Key support at 5350 for a bearish restart

Shanghai Composite (2481 last): holding in positive consolidation. The next ledge of closing resistance is at 2540 (for continuation to 2615/2680 major). Supports now mass below the reversal line at 2470 / 2450 to maintain the recent repair pattern.

SP 500 Futures (1255.50 last against globex low 1233.90):. Pattern Alert: morphing into constricting wedge – lower high / higher low. The apex resolution point is Dec 2. Closing focus range is now 1257 / 1239 now for a continuation / short technical reversal……our bearish restart lines currently 1215-1213 but would be lifted to 1221 early next week. Close above 1257 to regain solid technical footing with the top of the wedge 1269.50-1271

·         Daily Chart Resistance: 1264, 1271, 1277, 1286-1288 major ………1297 (7/28/11 failure on close)

·         Daily Chart Supports : 1257, 1251, 1244-1240.50, 1229, 1220 close for bearish restart, 1215-1213 accelerator, 1206 , 1198, 1188-1186 major

Weeklies: an inside week consolidation pattern awaiting resolution while a spinning top candle signals uncertainty. The top of intermediate range from 1287-1291 remains as major. Support concentrations are now 1249, 1226-1223-1220, 1203, 1191-1187-1185 now major.

Monthlies: November makes the retest of the top of the range. Our long term chart model has a 1273 / 1049 top to bottom chart levels. The LT chart's inside range with pinching 8-13-mth SMAs now resistance and 5/21 pincher as support at 1270 / 1218, now for full momentum loss in this time frame while a weekly close below 1188 for a bearish restart. Full chart repair needs a retake and weekly hold above 1274 as previously outlined

Chart Views

EURUSD (1.3777 last) a broad consolidation pattern bounded by  1.3830 / 1.3880  fills an air pocket to the next ledge at 1.3530- 1.3510 keeps closed an second air pocket follows to 1.3370-1.3350.  First resistance grouping reforms at 1.3660, buy stops are run above 1.3700 reopens the top of the range . Our daily chart model below.

Italian 10 yr yields Weekly Chart ……last week's breakout line at 6.29% / 7.26% – 7.56% above

DJ Industrials Weekly Chart Model Multiple groupings at 12220 still proving the overhead mark. Leaving major R at 12370-12400-12450 unscathed. The rising 5 wk SMA is now 11966 and a close below begins momentum loss process The bottom of the intermediate term range is now 11620 now becomes critical support. Major support is at 11330 for a bearish restart. Our weekly chart model below

DJ Transports Weekly Chart Model: an inside week forming after turning off the next ledge of chart resistance at 5060 reaching first ledge of supports grouping at 4800 leaves us in wait for resolution signal likely designated with break 5008 / 4724.  A close below 4780 would cause the first crack in the daily technical stance, above 5008 for fresh up leg to 5350. Our weekly chart model below

McClellan's Summation Index Indicator: Our technical measurement of the classic index. Holds in technically overbought readings as indicator extends above 84 reaching its highest level since May 2009. The last oversold signal occurred August 2011. May 2009 top saw a quick slide into a July 2009 oversold. A reversal is confirmed in a 2 step process starting with the indicator cross below 70, followed by a moving average cross over. This leaves us on watch for patterns of lower highs to confirm a top.

SP 500 Futures Daily Chart Retracement Model…..higher low, lower high constricting wedge formed by descending trend line off recent high / low

SP 500 Futures Weekly Chart Model….an inside week makes a resolution of last week's high / low at 1280.90/ 1208 for trend

ND 100 Futures Daily Chart head shoulders pattern beginning to fade after multiple tests of supports from 2292-2284 hold on close. Bull flag replaces leaves the top of the range at 2413-2416. Now looking for fresh leadership in the index.   

Daily Chart Resistance:  2378, 2388, 2413-2416 major

Daily Chart Supports : 2331, 2320, 2292-2284, 2264 full failure line key……..2190

Economics Calendar – Daily View

·         Friday, November 11^th: US (U. of Mich Confidence); EuroZone (UK PPI);Other (China New Yuan Loans)

Corporate Events Calendar

·         Fri Nov 11: earnings before the open (Allianz, DHI, Rolls Royce, Telefonica); sales (GWW)

Corporate Events Calendar – Week of Mon Nov 14

·         Mon Nov 14: earnings before the open (DYN, JCP, LOW, SolarWorld, Unicredit, URBN); earnings after the close (AGO) analyst meeting (BK, RAI)

·         Tues Nov 15: earnings before the open (Burberry, BZH, COV, DKS, HD, Hypo Real Estate, SKS, SPLS, TJX, WMT); earnings after the close (A, ADSK, DELL); analyst meetings (ADVS, ASH, IM, LNC, NBL, PXP) 

·         Wed Nov 16: earnings before the open (Infineon, TGT, TYC); earnings after the close (AMAT, NTAP); analyst meetings (ALK, AMP, Diageo, GWW, OMX, QCOM)

·         Thurs Nov 17: earnings before the open (GME, GPS, SABMiller, ROST, SHLD, SJM); earnings after the close (BCSI, CRM, DLB, INTU, MRVL); analyst meetings (LINTA, ROK, UBS

Major macro events to watch  

·         Fri Nov 11 – U of Michigan confidence

·         Fri Nov 11 - Int'l Banking Conf (put on by Chicago Fed and ECB).  Nov 10-11.

·         Fri Nov 11 – Italy's Senate could wind up voting on the budget measures.

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·         Sat Nov 12 - APEC Leaders Meeting November 12-13, 2011

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·         Sun Nov 13 - APEC Leaders Meeting November 12-13, 2011

·         Sun Nov 13 – Italian parliament expected to have voted on budget/austerity measures by Sun. 

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·         Mon Nov 14 – Italian 5yr debt sale (up to EU3B anticipated)

·         Mon Nov 14 – IMF officials due in Rome to start monitoring process

·         Mon Nov 14 – Unicredit earnings and capital raise plan

·         Mon Nov 14 – German CDU party conf. 

·         Mon Nov 14 – ECB reports its weekly SMP purchases.  Given reports that the SMP was active buying Italian BTPs, people will be watching to see how much this number jumps. 

·         Mon Nov 14 – Warren Buffett will be the co-host on CNBC's Squawk Box Mon morning. 

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·         Tues Nov 15 – FHFA expected to deliver further guidance to banks re HARP expansion. 

·         Tues Nov 15 – US eco data: PPI, retail sales, Empire Manufacturing (Empire is the first Nov-end eco data point). 

·         Tues Nov 15 – Eurozone eco data: GDP. 

·         Tues Nov 15 - the EU will propose “major changes” to rating agency rules on Tues – DJ

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·         Wed Nov 16 – BAC court case re its $8.5B mortgage repurchase settlement.

·         Wed Nov 16 – US eco data: CPI, IP, NAHB housing

·         Wed Nov 16 – Eurozone eco data: CPI  

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·         Thurs Nov 17 – UBS analyst meeting

·         Thurs Nov 17 – Eurozone fin min meeting

·         Thurs Nov 17 – US eco data: housing starts, building permits, Philadelphia Fed. 

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·         Fri Nov 18 – current US spending resolution ends Nov 18.

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·         Sun Nov 20 – Spanish elections

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·         Mon Nov 21 – Eurozone insurers – the EIOPA is currently running a stress test on interest rates. This is to be based on FY10 data and the results are due to be released on 21 November

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·         Wed Nov 23 - deadline for Joint Committee recommendations

·         Wed  Nov 23 – bankruptcy hearing in Harrisburg case.

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·         Mon Nov 28 – White House hosting summit w/European leaders

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·         Tues Nov 29 – meeting of Eurogroup finance ministers

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·         Wed Nov 30 – meeting of European finance ministers

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·         Mon Dec 19 – Greece has EU1B bond payment

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·         Thurs Dec 22 – Greece has EU1B bond payment

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·         Thurs Dec 29 – Greece has EU5B bond payment

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Roger Volz

Director

BGC FINANCIAL L.P.

Cash Equities

646-346-7412

1-866-323-1585

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