Week of 30th March 08, S&P 500, Soybean
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Stock Index Corner: S&P 500
S&P500:
The latest S&P 500 weekly chart is flashing "bears" are back !! Last week only had one day of UP day on Monday and gave back all its gains over the next several days. The Bulls are in possible trouble and the the medium term downtrend may continue for the next several weeks.
If the support 1260 is broken, then 1170 would be next major support based on 50% retracement of the major trend.
Big Picture: (monthly): Bearish
Medium term (weekly): Sideway to Bearish (Power Indicator lower than previous week's)
Short term (daily): Bearish
Fundamental:
The S&P 500 index exceeded the highs set in 2000, but there are some serious problems to consider. On March 18, 2008, Standard & Poors said that they expect the operating earnings for the S&P 500 companies to have dropped 5.9% in 2007, but be up 16.8% in 2008. Given the problems with subprime mortgages and the slow housing sector, Iraq, Iran, high energy prices, the weak dollar, and big increases in federal spending, the earnings growth estimate for 2008 sounds too good to be true.
The S&P 500 index exceeded the highs set in 2000, but there are some serious problems to consider. On March 18, 2008, Standard & Poors said that they expect the operating earnings for the S&P 500 companies to have dropped 5.9% in 2007, but be up 16.8% in 2008. Given the problems with subprime mortgages and the slow housing sector, Iraq, Iran, high energy prices, the weak dollar, and big increases in federal spending, the earnings growth estimate for 2008 sounds too good to be true.
Major World Indexes
Medium term trend: UK FTSE (Sideways), Nikkei (Down,), Australian ASX (Sideways), Shanghai FXI (down)
Commodity Corner: Soybean
Technical:The technical picture is getting bearish for the Soy family as a whole. The Soybean May fell to 38.2% level before bouncing back. The daily shows the downtrend may continue for the weekl ahead. THe Corn however has bounced back more strongly than the Soybean, but unlikely it will take out the March 13th's high.
Fundamental:
On March 11, 2008, the USDA reduced its estimate of 2007-2008 ending stocks from 160 to 140 million bushels, down from 574 million bushels in 2006-2007. The resulting 2008 ending stocks to use ratio is 5%, the lowest in four years. Worldwide, the USDA estimated that 2007-2008 ending stocks will drop from 63 to 47 million tons or 20% of annual use. Brazil and Argentina's soybean crops are only expected to increase slightly in 2008. In 2007-2008, the USDA expects exports to be down 8% and so far, they are down 3% from a year ago.
Fundamental:
On March 11, 2008, the USDA reduced its estimate of 2007-2008 ending stocks from 160 to 140 million bushels, down from 574 million bushels in 2006-2007. The resulting 2008 ending stocks to use ratio is 5%, the lowest in four years. Worldwide, the USDA estimated that 2007-2008 ending stocks will drop from 63 to 47 million tons or 20% of annual use. Brazil and Argentina's soybean crops are only expected to increase slightly in 2008. In 2007-2008, the USDA expects exports to be down 8% and so far, they are down 3% from a year ago.
Note: the above fundamentals are exerpts of dailyfutures.com
Trading ideas : (please do your own research and apply your profit/ stops management rules in all trades, please note except options writing, all the other trades may last just several days)
Writing Options: Emini S&P 500 OTM Calls, Gold, Soybean OTM Calls
Futures: Short Sugar & Soybean (for very short term play, 3-5 days)
Futures: Short Sugar & Soybean (for very short term play, 3-5 days)
Stock Options: Long BAC Puts, Long FSLR puts
posted by "Frank" at Sunday, March 30, 2008
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