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Global Market Wrap:
European Shares Spike, And Fail, On Macro Data
Equity Futures: Dow -11.00. S&P -0.20. NASDAQ -2.75. Japanese Nikkei -80.00. German DAX +2.00.
European Trade: The global equity markets traded under the influence of the macroeconomic news reports, as has been the recent norm. European markets spiked higher around the opening bell, after a report showed that the Chinese economy expanded at the fastest pace in almost two years. However, these gains were retraced as the session progressed, after two reports showed that the pace of expansion in the European manufacturing and service sides of the economy slowed in January.
European markets advanced as much as 0.50%, but the major indexes could not hold the gains. Germany’s DAX is trading up 0.20%, while Spain’s IBEX is lower by 0.15%. The emerging European markets turned red shortly after the opening bell, as EU officials rejected the idea to offer financial aid to Greece.
The yield spread between the 10-year Greek and German notes rose to 3% in Thursday trade, the most on record. Greece’s stock market lost 3.40%, being the worst performer of the session. Since the middle of October, the Greek stock market has lost more than 30%.
Throughout the overnight session, S&P futures saw little action. The futures market is currently trading close to the 1130.00 area, which has been an important support zone over the last two weeks of trading.
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 another major support zone. The moves to test and hold support are impressive, and are backed with global equity markets that are also holding support.
Elliott Wave: S&P futures were unable to break through the 1147 top recently, and prices fell into the 1124 zone, after an earlier turning point just one point below the previous 1147 wave v) top.
The market has formed a very complex corrective pattern in a red wave ii. Elliott wave traders will know that wave ii must not exceed the start of a wave i (1147), which in our case did not happen, so a bearish bias is valid and expected.
The market also broke through the red wave i low at 1126, but could not hold, which could be a signal that a larger decline will happen in the near-term. If that is the case, then resistances at 1147 must hold.
Upcoming Economic Moves:
08:30 EST Usd Unempl Claims Exp 441k, Prev 444K
10:00 EST Usd Philly Manufact Exp 18.1, Prev 22.5
11:15 EST Cad BoC Press Conference
Crude oil was recently trading at $77.70 per barrel, lower by $0.10. Oil trade has continued the selling seen in the previous sessions, and once again tested the 4 Hour chart swing point low around $77.50. Some of the long speculative interest in crude oil trade banked profit recently and in doing so aided the long side of Usd near-term buying
Gold was recently trading down by $7.20 to $1,105.40. Following some side-ways action in the $1115.00 area, the precious metal resumes its downtrend. Over the last two days of trading, gold has lost as much as $35 on re-new dollar strength. To the downside, the next important support area is in the $1075.00 area.
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Disclosure: No positions