Strong Start by European Equities

Equity Futures: Dow +65.00. S&P +7.60. NASDAQ +10.00. Japanese Nikkei +90.00. German Dax +20.00.

European Trade: European markets saw strong positive momentum from the opening bell, with the major indexes surging approximately 1%. The same positive momentum also influenced the S&P futures, helping the index reach a new yearly high, after it broke above the 1100.00 area.

As has happened lately, the market turned into the green after a series of important companies managed to beat analysts’ estimations. Among them, the most important two companies were the French bank Credit Agricole and the Swiss cement maker Holcim. As such, the French CAC 40 advanced 0.95%, while the Swiss stock market gained 0.40%

Strong gains came from the Nordic European markets, with Finland and Norway up 1.60%. Interestingly, the same markets posted strong declines in Tuesday trade.

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S&P Technical View: TheLFB Member Charts

4 Hour chart trend: Long. Main price points: 1025, and 1098.50. Looking for: Wave C

S&P futures have broken through the 1098.50 highs, which is the reason for a new wave count shown below. We are looking for an un-finished expanding diagonal pattern, in the black wave 5 (or C position from our separate daily chart review).

Each leg of our expanding diagonal pattern should be structured by three waves, labeled as wave A, B and C. On the four hour chart below, the market is trading in the last leg of our pattern, wave 5), with an extended red wave C in process.

Currently, the sub-wave III) is searching for the top, with a wave IV) pull-back to come, before an up-trend near to the 1120 area continues.

Sector Moves: The market moved broadly higher in Wednesday trade, but there were two exceptions, the media and the telecommunications sectors. The media sector declined after the CEO of Reed Elsevier resigned, something that triggered a wide spread sell-off. Right now, Reed Elsevier is trading down 5%, being the worst performer in the U.K. FTSE. In addition, only eight companies declined in the U.K. index, from which only four lost more than 1% in Wednesday trade.

Offsetting these declines were the miners, which surged after gold reached a new all time high during the European session, and the banking sector, which advanced on better than expected earnings results from Credit Agricole. Right now, the French bank is trading up 5.5%, being among the top gainers in European trade. In the U.K. FTSE, 8 out of the 13 best performing companies came from the basic materials sector.

Economic Moves: During the European session, a report showed that the U.K. unemployment rate remained at 7.8% in October, being the first time that the unemployment rate slowed its ascend in a little more than a year and a half. Still, the same report showed that the number on the Claimant count continued to increase, but at a slower pace. Ahead, the U.S. session will be marked by the Veterans Day.

Crude oil was recently trading at $79.55 per barrel, higher by $0.50.

Gold was recently trading higher by $12.60 to $1115.10.

Disclosure: No positions