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Global Market Wrap:
Shares Inch Lower Ahead Of U.S. Economics
Equity Futures: Dow -3.00. S&P -6.50. NASDAQ -1.00. Japanese Nikkei -25.00. German DAX -10.00.
European Trade: European markets have dropped below the breakeven line, after the Asian equity markets managed to post some gains. S&P futures also lost a few points overnight, extending the decline started during the last U.S. cash session.
The major European indexes are trading down by 0.20%, even though the markets had an attempt to move higher shortly after the opening bell. The declines were led by U.K.’s FTSE, which fell 0.25% and by Holland’s AEX index, which has so far lost 0.30%. However, the German Dax dropped only 0.05%, while the Swiss stock market gained 0.10%, suggesting that the market might eventually bounce back into the green.
Overnight trading volumes were subdued, and are likely to remain subdued until the upcoming U.S. session, when the ADP employment numbers are expected. Investors are preparing for a -74K read for the month of December, meaning that the U.S. private sector potentially lost the few jobs since September 2008. The ADP report will set the tone for the NFP numbers, due to be released this Friday. Additionally, investors also prepare for the ISM Manufacturing numbers, the crude oil inventories, and for the FOMC Meeting Minutes.
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 resistance point to battle this week. The moves to test and hold support are impressive, and are backed with global equity markets that are also looking bullish.
Elliott Wave: S&P futures reached new highs on Tuesday after breaking through the previous 1129 top. Technical traders will now look for a new resistance zone somewhere between the 1130-1135 area, where a potential top of a red wave c of a larger wave 5) may get hit.
Overall, we are looking for an ending diagonal pattern, which is a pattern that indicates a coming turning point. If that is the case then we can expect a technical decline in the equity market in the first part of 2010, which may attract Usd buyers if risk aversion finally hits the market.
Sector Moves: There was little movement among the European sectors in Wednesday morning trade. Most sectors moved between -0.25% and +0.25%, with the strongest moves coming from healthcare companies which gained 0.65%, and from retailers which have lost 0.55%. The same two sectors, healthcare and retailers, were also the most active in Tuesday European trade.
Upcoming Economic Moves:
08:15 EST Usd ADP Employ. Exp. -74K, Prev -169K
10:00 EST Usd ISM Manufacturing PMI Exp. 50.5, Prev. 48.7
10:30 EST Usd Crude Inventories. Exp. -0.4M, Prev. -1.5M
14:00 EST USD FOMC Minutes
19:30 EST Aud Retail Sales Exp. 0.4%, Prev. 0.3%
19:30 EST Aud Trade Balance. Exp. -1.79B, Prev. -2.38
Crude oil was recently trading at $81.80 per barrel, higher by $0.05
Gold was recently trading up by $7.10 to $1125.80.
Disclosure: No positions