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Treasury Bond Futures at 17 Month Lows

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December 1, 2016


S&P 500 and Dow futures advanced to new historical highs yesterday.

The Federal Reserve released its “Beige Book” on the economy yesterday, which said growth continued across most U.S. regions.

Jobless claims in the week ended November 26 increased 17,000 to 268,000, when 253,000 were expected.

The 8:45 central time November U.S. Manufacturing PMI is anticipated to be 53.9 and the 9:00 October construction spending report is estimated to be up .6%.

The 9:00 November Institute for Supply Management Manufacturing index is expected to be 52.5 and the prices paid portion of the report is anticipated to be 54.5.

A likely fed funds rate increase this month will not derail this bull market in stock index futures.

The long term trend is higher.


The U.S. dollar index is lower today due to mostly better than expected economic reports in the euro zone. However, longer term the greenback will be supported by prospects of higher interest rates in the U.S.

The euro currency is higher after a report showed the unemployment rate in the euro zone in October fell to its lowest level since mid-2009.

The European Union's statistics agency said the unemployment rate across the 19 countries that use the euro declined to 9.8% from 9.9% in September. That leaves the jobless rate at its lowest level since July 2009. Also, the number of people without work fell by 138,000 from October.

The unemployment rate in the euro zone peaked at 12.1% between April and June 2013.

The British pound is sharply higher on increased optimism that the U.K. can reach a single market agreement with the European Union.


Thirty year Treasury bond futures were sharply lower yesterday and are lower again today, falling to a 17 month low. There was additional pressure at the long end of the curve due to another day of sharply higher crude oil prices.

It appears very likely that the Federal Open Market Committee is on track to increase interest rates at its upcoming policy meeting.

The probability that the Federal Open Market Committee will increase the fed funds rate at the December 13-14 meeting is 99%, which compares to 94% yesterday. The probability was 68% at the beginning of the month.

The main trend is lower for the entire complex, but especially for the thirty year Treasury bond futures.


December 16 S&P 500

Support 219200 Resistance 2207.0

December 16 U.S. Dollar Index

Support 101.030 Resistance 101.700

December 16 Euro Currency

Support 1.0985 Resistance 1.0659

December 16 Japanese Yen

Support .87110 Resistance .87960

December 16 Canadian Dollar

Support .74370 Resistance .75030

December 16 Australian Dollar

Support .7366 Resistance .7431

March 17 Thirty Year Treasury Bonds

Support 149^2 Resistance 151^4

December 16 Gold

Support 1158.0 Resistance 1176.0

December 16 Copper

Support 2.6000 Resistance 2.6650

January 17 Crude Oil

Support 48.84 Resistance 51.34


For more information about these markets, please contact Alan at 312.242.7911 or via email at Thank you.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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About the author

Alan Bush has been a commodity analyst since 1976 focusing on the fundamental and technical aspects of stock index, interest rate and foreign currency markets. He has authored several articles for Stocks Futures and Options magazine and produced the “Futures Tech Focus” program, which is a technically based market outlook.

Alan served on the faculty of Oakton College as instructor of a course entitled, “Principles of Technical Analysis.” He has been interviewed on many national television programs, appearing on the Nightly Business Report, CNBC, CNN Moneyline, Reuters Television and Web FN. In addition, he has been frequently quoted in The Wall Street Journal, USA Today, The Bond Buyer and the Chicago Tribune and has been regularly interviewed on Chicago’s WMAQ radio business reports.

Alan can be reached at (312) 242-7911, or via email at

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