Retails Sales Expected to Move Markets Early this morning, G20 Summit Begins

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– crude oil futures trading inside the range from Thursday, and it recently failed at the PHOD which is a strong bearish clue this morning.  We are inside a price wedge with sideways ranges giving us support below and resistance overhead.  If price moves higher I will sell the PHOD as resistance, followed by buying a pullback above the PHOD as buyers take control.  They will try and push it up to the 86.60 resistance and I will be looking to sell that resistance.  If buyers push through the highs I will look for fake-out breakout first, and then buy a pullback.  If price falls lower I will buy the lows of the price wedge using the trend line, as well as buy the support below the price wedge lows 83.77, 83.35, and PLOD 83.17.  if we break below PLOD sellers are in charge and I will sell retracement down to the BMT  82.17 as a final target.  If price keeps dropping I’m buying major support 81.36 the lows of the sideways range.

– euro currency futures are trading with some very suspicious candlesticks inside the range from Thursday.  We can see a recent test of the PHOD failed which lends credibility to the lack of strength in this market right now.  If price rises I will sell the price wedge highs and PHOD as resistance.  If price makes it above PHOD I look for fake-out breakout first, followed by a pullback to buy above the PHOD with the target of 1.3925 above us.  I will then sell the resistance at 1.3925 looking for the failure come back down into the range below it.  If price drops I will buy support 1.3676 and PLOD 1.3602, 1.3573, and major support at 1.3557.  once price breaks below the PLOD sellers are in charge so look for price to push strongly below the support below it and sell retracements if sellers are strong.  Remember to buy the lows of the price wedge as support around 1.3500 this morning and use that as a final target for a short position below the PLOD.

– Gold futures are trading inside the range from Thursday this morning within a price wedge and strong sideways range.  If price rises I will sell PHOD and 1681.1, 1683.7, 1686.1 resistance levels.  Breaking above 86.1 I will then look for fake-out breakout first followed with buying a pullback if buyers are strong.  They will push it up to the resistance at 1693.9 where I will take profit and then look for a price reversal trade selling the highs above the price wedge around 93.9.  if price drops I’m buying the price wedge lows and PLOD 1654.3 support.  If price breaks below PLOD sellers are in charge and we will drop to the BMT  at 1650.3.  I will use the BMT as a target, but will be careful entering short around the BMT, waiting for new lower-lows to confirm entry short down to the major support 1627.6 where I will take profit and then look to buy the price wedge lows just below it.  It is also worth noting today’s G20 meeting may have a sloppy affect on price action on Gold futures today.

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– (CH) China monthly CPI data in line with expectations, China new yuan loans below market views

– (CH) China’s Q3 forex reserves growth slows

– (EU) Spanish and Italian yields rise as S&P cuts Spain and markets await Italy’s confidence vote; Italian confidence vote is expected at around 6:30 ET (12:30) CET, debating is expected to start near 5:00 ET (11:00 CET)

– (EU) G20 meeting, which is expected to be held today and Saturday, is expected to discuss bank recapitalizations

– (SI) Singapore’s Central Bank (MAS) reduced the slope of the Singapore Dollar (SGD) currency band in a policy easing move.

(SP) Spanish equities underperform, following sovereign ratings down.

– European shares gained during the session after some positive corporate news but banks were in negative territory coming under pressure from Fitch. The agency downgraded UBS and placed several other European banks on credit watch negative

– The French press reported European banks may face write downs of 50% on Greek debt holdings

– At the upcoming G20 meetings, officials are expected to discuss bank recapitalizations. According to sources, the recapitalization plan for banks may not involve immediate capital injections. The plan could focus on some type of backstop facility, likely to be provided by governments. The government backstop facilities may be comprised of contingent capital or ‘Cocos’. Some financial firms may be required to accept the Cocos immediately. 

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Traders will be watching early morning news to get this Friday off to a busy start, and then we will watch volume closely for an early slowdown to finish up the week.

830am Retail Sales will be the most important news this morning.  Strength in autos, due in part to aggressive government incentives, look to hold up retail sales data for September, putting the emphasis on the ex-auto and ex-auto ex-gas readings.

After 930am US Open we may have to wait through the 955 Consumer Sentiment followed by the 1000am Business Inventories.  After 1030am today we might not see much volume with today being G20 Summit as well as an early afternoon 200pm Treasury Budget report that was delayed from Thursday.  We will be watching volume closely from 1030 to 11am looking for clues of when this market is slowing down too much to continue trading.

Today is a Friday so we know there is going to be sloppy price action after 11am EST.

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