U.S. Markets close in 4 hrs 35 mins

Bundesbank Lowers Growth Forecast, Egypt Remains in Turmoil

Henry Marchell

The Bundesbank cut is growth outlook for 2013 Friday. The bank expects growth to be limited to 0.4%. This is quite the bearish call as it was predicting growth at 1.6%. The German news has led to a marginal decline in the euro.

Egypt continues to revolt against the Muslim Brotherhood and its leader, President Morsi. Protestors set fire to the headquarters of the Muslim Brotherhood in Cairo. For his part, Morsi has said the decrees will be renounced once the referendum is voted on. For some reason the opposition does not trust him and it is with good reason.

It has been posited that Syria’s loading of chemical weapons may be a ploy for Assad to be given asylum. He is playing a dangerous game, but one that he recognizes is lost for all intents and purposes. He will try to gather as much gold and wealth to keep him and his family secure in their villa somewhere.

But the real confusion will begin at 8:30 EST with the Employment Situation Report. With all the outlying situations for this report it is wise not to put too much faith in the numbers. Nevertheless, the market will trade from that data point. See the expectations below the Data Point section of the News.

CRUDE: Hi: 86.65; Low: 8601 falling.

Our outlook for Friday calls for more weakness to develop. Jan has worked in a consolidation pattern overnight and appears ready to slip back to test the Thursday low. Removing that level will give Jan a look at pattern support at 85.00. However, it is with a break of that level the super duper downside pivot at 84.00 is challenged. Jan will have minor resistance at 86.60 to 86.90. The key upside pivot to the intraday chart is 87.77. We are a seller of the rally with a stop above 86.60.

BRENT: Hi: 107.53; Low: 106.83

The abundance of crude is reflected in the spreads narrowing in their backwardation. Jan is responding to the ample supplies as well as the down trodden look for European growth for 2013. Our model suggests that there will be another leg to the downside Friday. This model is based on minor resistance at the 107.75 to 108.00 remain intact. The minor upside pivot to this resistance is 108.50. It is likely that Jan falls below the Thursday low. If this occurs the immediate support level is found at 106.25 to 106.15. The downside pivot is 106.00. The key downside pivot is 104.75. We are a seller of the rally. Ideally this will be at the 108.00 with a protective stop above 108.50.

RBOB: Hi: 2.6137; Low: 2.5975

At present Jan is congesting in a bearish formation. This pattern may have a little more consolidation before the trend reasserts itself. We are a seller of the rally. We do not feel all the liquidation from the funds has yet been seen. Jan will have minor resistance at 2.62 to 2.6250. the minor upside pivot is 2.6340. This area mention a fore is the sell zone to ply on the first pass. The minor downside pivot is 2.5890. However, our forecast calls for Jan to drop t the 2.5525 level with a break of 2.5850. Strong supplies and lack of demand is knocking the cajoobies out of the price. Don’t you just love all these technical terms?

Dist: Hi: 2.9527; Low: 2.9360

The lack of early cold has pressured this market. It is the seasonal tendency for 2oil to decline late December into early Jan. At issue is the disappointment over the early delivery of cold. That is exactly what we are seeing here. But the seasonals also look for 2oil to begin a rise into March. We are a seller of the rally. Liquidation before new taxes part of the reason as is a slowdown of the European economy. We look to sell the rally. This will be at the 2.9550 to 2.96 area. The minor upside pivot is 2.9650. 2.9345 is such a huge pivot. Ignore it at your own peril. breaking that level on an intraday basis will crumble Jan to the 2.9050 to 2.90 zone. However, a daily settle below the pivot is likely to produce a drop into the 2.85 zone early next week.

NAT: Hi: 3.684; Low: 3.630

Our model shows that Jan completed an upside run at the 2.750 level Thursday. It is now in a corrective path. For Jan to keep the bulls in the game will require that minor support at 3.60 to 3.59 holds. The minor downside pivot is a break of 3.58. Its key downside pivot is 3.50. We are cautiously bullish. We will look to buy Jan at the 3.60 level with a protective stop below 3.58. The minor upside pivot is 3.68. Jan’s key upside  pivot is, of course, 3.75.BOB

GASOIL: Hi: 916.00; Low: 910.00

We have been a seller of the rallies in this market all week. It has proven beneficial. There appears to be more downside ahead for Jan. She will have minor resistance at the 920.00 to 921.00 area. The minor upside pivot is 922.50. The outlook calls for Jan to continue its slippage to see 910.00 then the 904.00 to 903.50 zone. We continue to be a seller of the