E-mini S&P 500 futures have dipped overnight but then showed a strong rally with buyers coming in below our key support level of 1373. Further, Home Depot, the largest U.S. home improvement retailer, rallied 4.7% after its profit beat estimates. At this point, we see this market as being oversold below 1373.
The U.S. bond futures are still holding up strong, with the 30-year bond up slightly for the day at +.27%. Energy markets still are holding a bearish tone with more news of high oil supplies seemingly hitting the market daily. Crude oil futures are down -.44% while heating oil futures are down 1.2%. RBOB gasoline looks to be continuing its recent downward trend, with the JAN13 contract trading down below $2.60 this morning.
We focus our analysis on corn futures today. We first point out that we see a major line in the sand at the $6.70 area. This is the high area of last August, and we believe this will be a very major support level. As indicated, we are seeing corn in a correction from its massive summer rally to above $8. We drew a red trendline to indicate this correction for you. We also see a support level just below $7.20. The last time corn dipped below $7.20 (in Sept. 2012), buyers quickly came in with a 60+ cent rally. We believe that if for some reason corn gets below $7, this will be oversold territory and that buyers might be very excited to buy in at sub-$7 levels.
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