E-Mini S&P 500: No Change In The Range

Includes: AA, BA, BAC, C, CAT, EU, GE, HAL, HPQ, JPM, XLF
by: DeWayne Reeves

The E-Mini S&P 500 remains in the range of the last few trading sessions as earning's season approaches. The U.S. November Consumer Credit increased 10.0 % on higher credit card debt and more student loans. There was a $20.37 billion increase in consumer credit and an $5.60 billion increase in revolving credit. We look for an increase as a barometer of growth and recovery, but there are concerns that the higher unemployment may lead people to spend on household needs. Last week Alcoa announced they would be decreasing their global smelting capacity and expectations were set for a fourth quarter loss. The loss from continuing operations came in at $193 million or 18 cents per share. The 12% decrease in smelting may be in shutting down select operations in the U.S. and Europe. They do see global demand rising by 7% in 2012, but have concerns about cost of production verses product sales.

Euro summits have not really calmed the fears associated with the eurozone! There is still the threat of potential defaults and possible countries leaving the European Union ((NYSEARCA:EU)). They still need to raise $115 billion by January 20th. The debt sales for Spain and Italy on Thursday and Friday will be the tell all of investor confidence in the eurozone. The European Central Bank (ECB) President Mario Draghi had made cheap loans to euro banks in an effort to bring more liquidity into the banking sector. Unfortunately, the loans have been allegedly hoarded and the money has been re-deposited in the overnight ECB facility rather than loaned to other banking facilities.

German Chancellor Merkel and French President Sarkozy took a hard line with Greece restricting bailout funds to terms of a bond swap and deal. The next Euro monetary policy announcements from the ECB and the Bank of England (BOE) are due Thursday! The ECB is expected to hold rates at 1.0%. The eurozone heads insist on keeping the money supply balanced to avoid any potential inflation, so it will be interesting to see what creative financing ECB President Draghi may suggest. The eurozone will have some finance challenges along with the (Standard & Poor's) credit agency warning for a potential downgrade of 15 nations along with the European Financial Stability Facility (EFSF).

The situation in Iran seems downplayed today as threats to block the Strait of Hormuz still exist. Iran has also been reported to have taken into custody an American "spy" to be possibly sentenced to death. The U.S. military is well-healed to deal with any conflict in the Gulf, but other factors raise the bar on the fragility of the situation. Russia has opposed the sanctions against Iran. China has arranged for a barter system with Iran. (Other nations have signed waivers to cut back on shipments from Iran.) The United Arab Emirates have almost completed an oil pipeline to bypass the Strait of Hormuz, but has delayed the launch date now.

China is thought to become the number one oil importer in the world bypassing the U.S. Things could heat up with so much on the table and in history hasn't the oil been the spur for conflict many times? The facts remain the same, but the investment world seeks to overlook the eurozone and the Middle-East problems for the moment at least.

On the stock side: JP Morgan Chase and Co. (NYSE:JPM) was down 0.17 % to $35.28. Citigroup Inc. (NYSE:C) was up 1.86 % to $29.06. Bank of America (NYSE:BAC) was up 1.46 % to $6.25. Alcoa Inc. (NYSE:AA) was up 2.89 % to $9.43. Boeing Co. (NYSE:BA) was up 0.74 % to $73.98. Caterpillar Inc. (NYSE:CAT) was up 1.40 % to $96.63. General Electric Co. (NYSE:GE) was up 1.13 % to $18.64. Halliburton Co. (NYSE:HAL) was up 1.14 % to $35.38. Hewlett Packard Co. (NYSE:HPQ) was up 0.15 % to $26.43. SPDR Select Sector Fund - Financial (NYSEARCA:XLF) was up 0.52 % to $13.45.

E-Mini S&P 500 Chart.

(Click to enlarge)

Tuesday, what to expect! We maintain a bullish bias unless the E-Mini S&P 500 penetrates $1239.50. Tuesday, we anticipate an inside to higher day! Today's range was $1277.75 - $1267.25. The market settled at $1275.50. Our comfort zone or point of control for this market is $1273.75. Our anticipated potential range for Tuesday's trading is $1282.50 - $1264.50. Longer-term, if we stay on the path, we are looking for potentially $1315.00 as the next upside target! For the shorter-term trader, we view $1265.00 - $1264.00 as critical levels. If these levels are maintained, we see the shorts getting squeezed out. On the flip-side, a break below the $1264.00 level could open the door to $1245.00 - $1235.00. We view these levels as potential buying opportunities.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.