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Cliff Wachtel
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Cliff Wachtel, CPA, is currently the Director of Market Research, New Media and Training for Caesartrade.com, a fast growing forex and CFD broker. He covers a variety of topics including global market drivers, forex, currency hedged and diversified income investing, and is currently working on a... More
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  • FOREX, COMMODITIES, STOCKS OUTLOOK March 15TH: Cliff's 2 Minute Drill 0 comments
    Mar 15, 2010 8:38 AM

    NB: THE FOLLOWING IS AN ABRIDGED VERSION FOR A FAST OVERVIEW OF ALL MAJOR GLOBAL STOCK, FOREX, AND COMMODITY MARKETS -- FULL ANALYSIS AND CHART ILLUSTRATIONS OF RECOMMENDED TRADES GO TO http://fxmarketanalysis.wordpress.com/ AND SELECT "DAILY OUTLOOK" FOR TODAY

    Stocks: Prior Day: Asia, Europe up, USA down. Today: Asia, Europe down. Stocks down as they approach 12 month highs amid multiple concerns over China growth, EU debt crisis and Finance Ministers Meeting, significant event risk this week (see events) The bellwether S&P 500 is again pulling back from its upper Bollinger Band, raising the probability of some pullback, though the prior 2 incidences of this saw no such move down. Also, negative comments by Moody's about growing risks to the blue-chip credit ratings of the US, UK, Japan, France, and Germany, as well as that of Spain further weigh risk sentiment.

    .- FX: Slight bias to safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], as flat/down stocks reflect market seeking direction from news over the coming days.

    - Main events: FRI: USD: US retail sales+, UoM Sentiment-, MON: USD: TIC Long Term Purchases, EUR: EU Fin Ministers Meeting through Tuesday, TUES: AUD Monetary Policy Meeting Minutes, EUR German ZEW Economic Sentiment, USD Building Permits, FOMC statement, Bernanke Testifies, WED: JPY BoJ Press Conference, GBP MPC Meeting Minutes,

    - Big Theme: Stocks pulling back from 12 months highs as numerous concerns this week raise doubt about further risk appetite, USD rally at a crossroads (see EUR/USD CHART). Resolution could come from the EU Finance Ministers meeting and / or the FOMC statement.

    STOCKS:

    US: Down Friday: More 'chop and drop,' as stocks drifted sideways Friday on mixed data to end slightly lower on the day as the 1150 12 month high served as resistance, but the index is still about 1% higher on the week. Note that commodities are already down trending, despite a weakening US Dollar, and they often lead stocks down. Good retail figures appear to have sparked 'sell the news' profit taking.

    Asia Stock Outlook: Down Friday and early Monday trade GMT: The major Asian markets were flat or down following up on US profit taking Friday as they to sit near 12 months highs with major event risk ahead from the EU policy meeting today and potentially market moving central bank statements from the US, Japan, and Australia, as well as other coming key events (see summary above)

    European Stock Outlook Down Friday and early Monday trade GMT: European shares opened lower following Asia and the US over a variety of concerns that weigh on stocks (see summary at top) as they approach new 12 month highs.

    Commodities Outlook: Futures Down Friday and early Monday trade GMT, despite a weakening US dollar. Stocks struggle at 12 month highs and the bellwether S&P 500 is beginning again to pull away from its upper Bollinger band, suggesting some kind of risk appetite pullback is more likely in the near term barring new major news.

    Crude Oil Daily Outlook: Down Friday and early Monday trade GMT from about $83 last week to about $80.60, Following the EURUSD moves. Likely to remain range-bound unless further major news good or bad.

    Gold Daily Outlook: Down Friday and early Monday trade GMT: despite USD weakness, as numerous concerns cited above weigh on risk assets.

    FOREX Daily Outlook: Friday and early Monday trade GMT: no clear theme to risk or safety from FX itself, though falling stocks cause us to lean towards to safety currencies as risk appetite struggles amidst concerns noted in the above summary. USD, CAD strong vs. Most, GBP down vs all.

    US Dollar Daily Outlook: Friday and early Monday GMT trade: Up vs. JPY, AUD, CHF, GBP, EUR, steady vs. the CAD, NZD.

    Note that the EUR/USD is currently pulling back at a major resistance zone at 1.3700-1.3800 Within this range there is multiple strong resistance: the 61.8% Fib level, a downtrend line that is over 4 months old, a 50 day declining SMA, and the upper Bollinger Band. Note that if the trend can lift past all of this strong, multi-layered support, it would send a powerful signal that the EURUSD uptrend has strength. If not, the widening gap in the 'death cross' between the dropping 50 day SMA and 200 day SMA gets stronger and the downtrend more entrenched. Of course, technical factors are likely to get swept aside by any major positive or negative news coming out of the ongoing EU policy meeting regarding the EU debt crisis.

    Euro Daily Outlook: Friday and early Monday trade GMT: down vs. the USD, CAD, AUD, CHF (hard) JPY, up vs. the GBP, steady/up vs. the CHF

    Yen Daily Outlook: Friday and early Monday trade GMT: Up vs. the EUR, down vs. the USD, AUD, GBP

    British Pound Daily Outlook: Friday and early Monday trade GMT: Down vs. CHF (hard), EUR, USD, AUD, JPY, all others too.

    Australian Dollar Daily Outlook: Friday and early Monday trade GMT: Down vs. CAD, AUD, steady vs. CHF, JPY, up vs. GBP

    New Zealand Dollar Daily Outlook: Friday and early Monday trade GMT: Steady vs. USD

    Canadian Dollar Daily Outlook: Friday and early Monday trade GMT: steady to higher vs. virtually all majors on a string of positive economic data raising rate increase expectations to the highest of any currency, even higher than those of the AUD per Credit Swiss rate swaps.

    Swiss Franc Daily Outlook Friday and early Monday trade GMT: Up vs. the EUR, GBP, steady vs. the USD, JPY, down vs. the AUD, other commodity dollars

    CONCLUSIONS & Big Picture: Short term: The S&P 500, our key risk asset barometer, like other major stocks, stuck at / near the resistance of new 12 month highs, with considerable uncertainty from events noted in the market summary at the top leaving markets without the conviction to push higher. Other notes of concern for the risk asset rally: The S&P 500 has begun again to pull away from its upper Bollinger Band. That hasn't meant much over the past month, but usually it signals a pullback to at least the 50 day SMA. Also, commodities have begun to pull back, and they often lead stocks down. Their drop is more noteworthy because it is occurring over the past days despite USD weakness, which bolsters commodities.

    Trade ideas: SEE FULL LENGTH VERSION FOR OPPORTUNITIES IN GOLD, EUR/USD.

    DISCLOSURE AND DISCLAIMER: OPINIONS EXPRESSED ARE NOT NECESSARILY THOSE OF AVAFX, AUTHOR HAS NO POSITIONS IN ABOVE INSTRUMENTS.


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