Global Market Wrap: European Stocks Can't Budge the S&P

Includes: DIA, MT, QQQ, RIO, SPY
by: The LFB

Equity Futures: Dow +7.00. S&P +0.80. NASDAQ -0.25. Japanese Nikkei -7.00. German DAX +3.00.

European Trade: The European cash markets advanced around the opening bell, but S&P futures traded in mixed fashion, forming a swing point high in the 1145.00 area that looks to be solid resistance in the near-term.

The regional European indexes have averaged moves of 0.60% Thursday morning as the two heavyweight sectors, banking and basic materials added important points. However, S&P futures have failed to follow this uptrend, even though Nikkei futures gained hard after losing a few points in the overnight cash market. This divergence between the cash and futures markets might be caused by the upcoming macroeconomic calendar, which includes the ECB’s interest rate decision, U.S. Retail Sales and Unemployment numbers.

The decisions today by the European Central Bank will be reflected in the financial market over the coming period, as the market adjusts fair value on forward growth prospects. Investors will focus on hints that could pinpoint the period when the ECB will begin to raise rates, but the treat of anemic regional growth will also be an important factor.

In European trade, the German DAX gained 0.55%, the U.K. FTSE rose 0.60%, while Norway’s OBX index rose 1.20%. Belgium’s and Slovenia’s shares were the only ones that declined in early trade. Among sectors, banks and basic materials added the most points. Basic materials continue to be in the spotlight for a second consecutive day, after the same sector gave strong support to the equity market in the previous session.

Rio Tinto (NYSE:TRP) was in high demand on Thursday, after a report showed that the company had increased its iron ore output by almost 50%, beating most estimates. Rio Tinto advanced 2.20%, being among the top gainers in the U.K. FTSE index. ArcelorMittal (NYSE:MT) advanced 1.50% in France’s CAC 40 index, on BNP’s rating upgrade. Also in the CAC 40 index, GDF Suez fell 2.5%, being the worst performer in the index, after the company was downgraded to “neutral” from “buy” by BofA’s analysts.

TheLFB Charting Link

S&P Technical View: TheLFB Member Charts

4 Hour Chart Flows: Long Price Points: 1127 Looking for: Near-term bearish view

Momentum: The S&P futures market confirmed a Long momentum read on Nov 11th and built a solid near-term support base around 1095. The 1125 area will be a major support zone. The moves to test and hold support are impressive, and are backed with global equity markets that are also holding support.

Elliott Wave: S&P futures prices moved higher recently, near to the 1141 zone, which could be a move in a Long, corrective blue wave ii)/b). A 1147 high from this week is still in place, which means that a Short expectation from an Elliott wave perspective remains valid.

With this being said, we will look for a move into the 1112 zone, with a blue wave iii)/c) leg that should follow once the 1127 low of a blue wave i)/a) is taken out. Meanwhile the 1147 top must stay in place, otherwise the wave count will need to be re-worked.

Upcoming Economic Moves:
07:45 EST Eur Min. Bid Rate Exp 1.0%, Prev 1.0%
08:30 EST Eur Int. Rate Press Conf
08:30 EST Usd Retail Sales. Exp 0.4%, Prev 1.3%

Crude oil was recently trading at $80.35 per barrel, higher by $0.65

Gold was recently trading up by $2.40 to $1139.20.

Disclosure: No positions