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FOREX, COMMODITIES, STOCKS OUTLOOK June 10th: Cliff’s 2 Minute Drill 11:30 GMT

NB: THE FOLLOWING IS AN ABRIDGED VERSION FOR A FAST OVERVIEW OF ALL MAJOR GLOBAL STOCK, FOREX, AND COMMODITY MARKETS -- FULL ANALYSIS AND CHART ILLUSTRATIONS OF RECOMMENDED TRADES GO TO http://fxmarketanalysis.wordpress.com/   AND SELECT FOREX, COMMODITIES, STOCKS OUTLOOK {date}: Analysis, Events, Trends

Stocks: Prior day: Asia mixed, Europe up, US down. Today: Asia up, Europe up. Looks like a risk asset bounce with all indices up today, though the S&P 500 has now formed a bearish ‘death cross (50 day MA crosses below 200 day MA) signaling a longer term downtrend for stocks and hence most risk assets. (see below for ramifications). This reinforces the bearish indicators we pointed out last week in  our special report: Three Powerful Bearish Signs:  S+P 500 Heading To Around 830, Short Risk Assets. The bellwether S&P 500 has now formed  

-        US Bonds: Up slightly on falling US stocks . Yields on the benchmark 10-year auction were 3.24%.

-        Commodities: Up Oil up on bounce off strong support, gold continues to rise on EUR declines

-       FX:  Overall bias against safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GB in order of risk appetite appeal], mostly according to a currency’s place on the risk spectrum, but with the NZD strongest on its rate increase and hawkish RBNZ comments promising more ahead. JPY weakest, followed by USD, CHF, GBP, EUR…

-           Main events: MON: AUD ANZ Job Advertisements m/m EUR German Factory Orders m/m, CAD BoC Gov Carney Speaks TUES: USD: Fed Chairman Bernanke Speaks CAD Housing Starts WED:AUD Home Loans m/m, NAB Business Confidence, GBP Trade Balance CNY New Loans USD Fed Chairman Bernanke Testifies, Crude Oil inv., Beige Book, NZD Cash Rate/Press Confr/Rate St. THUR: AUD Employment Change/Rate, RGBA Gov Stevens Speaks, CNY Trade Balance EUR French Ind. Prod., Minimum Bid Rate, Trade Balance, ECB Press Confr. GBP Asset Purchase Facility, MPC Rate St. Official Bank Rate USD Unemployment Claims  FRI: CNY CPI y/y, Fixed Asset Inv., Ind. Prod y/y PPI y/y,  GBP PPI Input m/m USD Core & Retail Sales, Prelim UoM Consumer Confidence

        Big Theme: Risk Appetite Gone Again? Friday’s panic selloff in risk assets on news about Hungary and poor US jobs reports continues thus far into the week, as a mild rally attempt in Asia this morning reverses in Europe, further entrenching the downtrends in virtually all risk assets over the past months. See also our latest special report: Three Powerful Bearish Signs:  S+P 500 Heading To Around 830, Short Risk Assets in which we discuss how key risk asset charts show 3 major signs of a more prolonged bear market ahead, and Three Must-See  Indicators Say Gold Ripe For Short Term Correction. 

 

STOCKS:

US:  Down – Once again, early strong buying faded as sellers overwhelmed bargain hunters to send stocks lower for the day after the  in the S&P 500 had been up over 1%. The index’s 50 day moving average has crossed below its 200 day moving average, forming a ‘death cross’ that portends an extended down trend.

Trading Ramifications: Because the S&P 500 is our single best indicator of risk appetite, this death cross provides confirmation that most risk assets are likely to find themselves lower in the months ahead. That means our bias is go with various short plays (including options, short on CFDs, etc) on stocks, most commodities, and risk currencies when they finish short term rallies and to go long safe-haven assets like AAA bonds of the prime safe haven currencies (JPY, USD, CHF).

US Bonds: Up Wednesday- An auction of the 10-year Treasury Notes drew a strong bid-to-cover of 3.2 and produced a yield of 3.24%. The results didn't have much of an immediate impact on Treasuries, but with the stock market's afternoon slide the benchmark 10-year Note was able to eke out a fractional gain.

Asia Stock Outlook: Up Most Asian stock markets higher on surging China export data and higher Japanese Q1 growth

European Stock Outlook: Down – European shares fell sharply in the opening Thursday, ahead of interest rate decisions by the European Central Bank and Bank of England, concerns about BP, banks, and retailers all weighed on stocks thus far today.

 

Commodities Outlook Wednesday and early Thursday trade GMT: Mixed- Oil up, precious metals down. Natural gas prices resumed their slide.

Crude Oil Daily Outlook: Up- Oil futures continuing higher Wednesday into Thursday, up over 3% from $72.47 at the open in Asia to around $74.60 at the close in the US, helped by improving US inventory data that showed a larger-than-expected draw of 1.83 million barrels when a draw of 900,000 barrels had been expected.

Gold Daily Outlook: Down - Futures dropped 1.29% since the open yesterday from around $1238 to $1230 Wednesday, continuing to fall in early Thursday European trade to just under $1222, reflecting this week’s stabilization in the Euro, which has rallied this week. Silver has slid even further. Expect gold to continue to move opposite the Euro in the coming weeks at minimum.

FOREX Daily Outlook Wednesday and early Thursday trade GMT: A clear risk asset rally day, with fx moving mostly according to a currency’s place on the risk spectrum, but with the NZD strongest on its rate increase and hawkish RBNZ comments promising more ahead. JPY weakest, followed by USD, CHF, GBP, EUR…

US Dollar Daily Outlook: Down vs. all- EUR, JPY, CHF, GBP AUD, CAD, NZD. USD weakness on a combination of factors: good EUR already bouncing off support on both technical support, good data, Jim Rogers recommendations, and on lack of further bad news pressures the USD and lack of any really USD supportive news. Meanwhile, commodity dollars and JPY get some aid from good Chinese export data and NZD rate hike with more hawkish comments.

 

Euro Daily Outlook: Up vs. USD, JPY, down vs. the GBP, AUD, CAD, NZD, little changed vs. the CHF (but gaining today) on both a technical bounce and good data, famed commodities investor Jim Rogers is reported saying EUR may be a buy

Yen Daily Outlook: Up vs. the USD, down vs. all others -the EUR, CHF, GBP, CAD, AUD, NZD on rising risk appetite day as Asia, Europe stocks rise, NZD rates up with more coming.

British Pound Daily Outlook: Up vs. the USD, JPY, CHF, EUR, flat or down vs. the commodity dollars in keeping with its place in the risk spectrum

Australian Dollar Daily Outlook:  Up vs. all except for the NZD as today becomes a risk asset rally.

New Zealand Dollar Daily Outlook: Up vs. all as the RBNZ raises rates and issues comments more hawkish than expected that suggest more ahead. NZD strength compounded by overall rising risk appetite and EUR strength pushing down the USD.

Canadian Dollar Daily Outlook:  Up vs all except for the AUD and NZD in keeping with its place as the #3 risk currency.

Swiss Franc Daily Outlook: Little changed vs. the EUR, Up vs. the USD, JPY, down vs. all others in keeping with its #3 safety fx ranking on a ‘risk on’ day in which risk assets are rising.

In recent days the CHF has been making up for lost ground as the #3 safe haven currency in the broader multi-week risk aversion trend. The CHF missed out on most of this due to market belief that the SNB would continue to intervene to keep it falling along with the collapsing EUR. However, that effort clearly has been suspended as of Friday’s plunge by the EURUSD through strong mult-year support with no relief in sight.

CONCLUSIONS & Big Picture: Today shaping up to be a risk asset rally on good Chinese, EU data, rising stocks in Asia and Europe, and Jim Rogers saying now may be time to buy the Euro. Beware, however, as we note in our recent special report: Three Powerful Bearish Signs:  S+P 500 Heading To Around 830, Short Risk Assets. Stocks are the key barometer for risk assets, with the S&P 500 the most indicative of overall risk asset trends. It is showing 3 major bearish signs of more downside to come for the coming months( long term down trend, death cross, average percent drop below major moving averages still suggests more decline). See the above links to out weekly outlook reports for more on likely market moving forces for the coming week and beyond. Gold also looks ready to test support and make a good short term short, see Three Must-See  Indicators Say Gold Ripe For Short Term Correction

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