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Global Market Wrap:
Shares Lower In European Trade
Equity Futures: Dow -39.00. S&P -5.30. NASDAQ -7.00. Japanese Nikkei -15.00. German DAX -10.00.
European Trade: European shares shed approximately 1% around the opening bell, as investors turn their attention to the higher yields, and relative safety, of the Treasury and Gilt markets. Earlier in the day, Asian markets also closed lower, while S&P futures lost 5 points after hitting a 15-months high during the previous U.S. session.
Shares in Europe were driven lower by basic materials, real estate and by the telecommunication sectors. The only companies that managed to stay above the breakeven line were from the oil & gas sector, but even so, the gains were very small. The telecommunication industry was also among the worst performers during the prior U.S. and Asian sessions.
From the start of the European cash session, the German DAX lost 1.05%, Spain’s IBEX fell 0.95% and Switzerland’s SMI lost 0.90%. There are several regional indexes that did not follow the market’s bearish momentum; Italy’s MIB, which traded in the green, and Norway’s OBX index, which gained 0.35%.
On the macroeconomic front, the data released throughout the European session printed mixed. U.K. house prices rose 1% in December according to the Halifax HPI, recording the sixth consecutive month of gains. However, a different report showed that retail sales dropped 1.2% in the Euro-zone, even though the market expected a 0.0% read. Ahead, investors prepare for the Bank of England interest rate decision, scheduled at 07:00 EST and for the U.S. Unemployment Claims, due to 08:30 EST.
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 Wednesday, with a very thin volume and momentum reads, after breaking through the previous 1132 top. Technical traders may now be looking for a turning point between the 1130-1135 areas, where a potential top of a red wave c of a larger wave 5) may be 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.
Upcoming Economic Moves:
07:00 EST Gbp Rate Statement Exp. 0.50%, Prev. 0.5%
08:30 EST Usd Unemployment Claims Exp 449K, Prev 432K
10:00 EST Cad Ivey PMI. Exp. 52.2, Prev. 55.9
Crude oil was recently trading at $82.50 per barrel, lower by $0.65
Gold was recently trading down by $6.60 to $1129.80.
Disclosure: No positions