Daily Client Note
Global Markets Review
Reality Meets Mr. Market
Latest Market Update:
- Reality meets expectancy this week, as positive headlines will need to be turned into market responses if global asset classes are to test mid-term resistance going into year-end.
Gold: Sup 1724 Res 1774 Neutral 1748. Silver: Sup 31.45 Res 34.20 Neutral 32.85. Oil: Sup 98.90 Res 102.45 Neutral 100.70.
S&P500: Sup 1228 Res 1270 Neutral 1250. Dax: Sup 5975 Res 6225 Neutral 6100. DXY: Sup 77.75 Res 79.40. Neutral 78.55.
EUR: Sup 1.3365 Res 1.3560 Neutral 1.3460. GBP: Sup 1.5575 Res 1.5815 Neutral 1.5690. JPY: Sup 77.35 Res 77.95 Neutral 77.65.
Market Update Recaps:
- European risk markets closed at the lows of the day sending EUR values lower and dollar index values higher. The 1245 SP500 area is pivotal.
- The ECB Deposit Facility has seen record usage AFTER the Bailout, indicating weak inter-bank liquidity and a likely reversal in euphoria.
- If banks are storing cash with the ECB at record levels, after cuts in Swap Line rates, equity indices could struggle to break resistance.
- Futures reversed off resistance after 1-2% overnight gains, in response to mixed NFP employment data that is unlikely to create momentum.
- SP500 trade closed 2010 at 1253. In 11 months of 2011 trade there has been a three point overall move. Confirmation that Traders dominate.
- Heavy consolidation is taking place across all global asset classes after the wild ramp higher on the latest debt bail-out exercise.
- Investors withdrew $3.7B from domestic equity funds this week, totaling over $44B in the last 14 weeks. Retail is not buying into the volatility created by ever-reducing market participation levels and an inability to move past Dec 1998 levels on SP500 trade.