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Global Market Wrap:
Financials Still Weigh On Global Sentiment
Equity Futures: Dow +16.00. S&P +2.40. NASDAQ +4.50. Japanese Nikkei -40.00. German DAX -5.00.
European Trade: There has been a slight divergence between cash and futures market trade during the overnight session. The European cash indexes opened in the red, extending the sell-off started in late Thursday trade, but S&P futures actually added a few points, recovering some of the ground lost during the prior cash session.
As expected, the vast majority of declines came from the financial sector, following President Obama’s proposal to limit the risk taken by banks. If this decision passes, the financial sector will probably have lower revenues going forward, especially investment banks. In European trade, the banking sector lost 1.70%, with important declines coming from Barclays, down 4.00%, Deutsche Bank, which lost 4.30%, Credit Suisse down 5.60% and UBS, which so far has lost 4.30%.
However, the financial sector was the only one that found the strength to move, while the other representative European industries barely moved during early trade.
From the start of the European session, shares lost on average 0.40%, although, there were some exception. Norway’s OBX index gained 0.50%, while Greece’s stock market advanced 0.55%. Over the last period of trading, the Greek stock market has been the weakest regional index, dragged lower by the country’s poor debt outlook.
Overnight, the U.S. futures market added a few points, after the bouncing from the swing area of the last two months of trading, at the 1110.00 area. A break below this price point has the potential to force more sellers into the market, which might happen on continued financials weakness.
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 broke through the 1124 support region yesterday as highlighted, which was a key for move into the 1107 lows. Now that the S&P futures are trading in a sharp, blue wave iii) leg, they should reach even lower levels in the near-term.
We are targeting the 161.8% Fibonacci region shown around 1103, where wave iii) may hit the low for a reversal bounce into a corrective, blue wave iv).
Overall near-term bearish bias remains valid as long as the market trades below the 1124 resistance zone.
Upcoming Economic Moves:
Crude oil was recently trading at $76.25 per barrel, higher by $0.20.
Gold was recently trading down by $7.20 to $1,096.00.
Disclosure: No positions