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Richard Cox is a university teacher in international trade and finance. Lecture halls of 80 to 120 students. Lessons in macroeconomics and price behavior in equity markets. Investing strategies in these articles are based on technical and fundamental analysis of all the major asset classes... More
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  • MarketBulls.net Weekly Report: Stock Market Volatility Drops Before Non Farm Payrolls Release 0 comments
    Mar 10, 2013 3:50 AM

    MarketBulls.net Weekly Report: Stock Market Volatility Drops before Non Farm Payrolls Release

    by MarketBulls.net

    The week so far has been data-heavy and most of the market activity has interpreted the results in a positive manner. The S&P 500 has moved above 1540 (its highest levels this year), and the Dow Jones Industrials are now trading at all-time highs (surpassing the previous record posted in 2007) but there is still scope for gains for investors. Early in the week, market interest focused on event risks in Australia, as central bank meetings and GDP data gave markets an indication of the recovery prospects in the region. The Reserve Bank of Australia left interest rates on hold and made no indication that there is an immediate need for decreased monetary restrictions as bank lending remains healthy. This supportive tone is suggestive of another run higher in the ASX at current levels.

    In the US, the next key releases will be the ISM non-manufacturing data (important because the services industry makes up 70% of the US economy), and the monthly Non Farm Payrolls number on Friday. The employment figures tend to be the main data event for the month, and this time will likely be no different. Analyst expectations for the number have risen since Wednesday's ADP employment results, which showed very strong results and also upwardly revised the number for the previous month. As of now, expectations are calling for an increase of 163,000 jobs for the month, and this would be an improvement from the previous monthly data (which showed an increase of 157,000 jobs). Strong data here could send the S&P to a retest of its all time highs.

    In Europe, Retail Sales showed a decline of -1.3%, and while the number was negative, markets still responded favorably, given that the number was expected to show even greater declines. The other major data release was the Eurozone GDP number, which showed a drop of -0.9% (this was in line with analyst estimates). Toward the end of the week, the regional event risk came with the European Central Bank (ECB) monetary policy meeting, where no change in interest rates was seen and the accompanying monetary policy statement showed nothing that spooked investors. The ECB outcome is Euro positive, and should bhelp send the currency back into the mid 1.30s.

    Stock Market News: Rally in Dow Vulnerable to Corrections if Data Disappoints

    This week's news events will be highly important for later expectations in the Dow Jones Industrials, which has seen massive rallies this week. A weaker number in the Non Farm Payrolls will surely lead investors to a round of profit taking at these levels and bring prices back to their entry levels for the week. The better ADP report has led to increased expectations, so a negative number would lead to bigger changes in valuations than if we see a positive result. Caution here will once again depend on the economic data.

    Binary Options News: Market Volatility to Increase at Week's End

    Binary options traders will remain close to their trading stations at the US open on Friday, as implied volatility will see a spike into the beginning of Wall Street trade. Positive employment figures will lead to increases in CALLs for all of the major stock indices, while the reverse will be true for the US Dollar toward the end of the session.

    Binary Options Trading Signals:

    Binary options trading signals for today include PUT options for the S&P 500 if we see a break back below previous resistance at 1530. This would signal that the short term rally has reached completion and a sideways drift is expected with a modest downward bias.

    Forex Trading Technical Analysis:

    Forex Trading Technical Analysis shows that the EUR/USD has overcome previous resistance at the 1.3060 level and traders will now look to buy on dips on a retracement back to these support levels. Overall, the trend is negative but the EUR/USD forecast for the remainder of the month is bullish as prices have reached dangerously oversold levels. For more investing tips, binary options strategies and forex trading signals, visit MarketBulls.net.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: market-outlook
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