Home > Uncategorized > Brief Update 2009/12/11: Multi-Asset Class Trend Decisions Out Of Last Week Might Finally Impact Equities

Brief Update 2009/12/11: Multi-Asset Class Trend Decisions Out Of Last Week Might Finally Impact Equities

▪  While anticipation of a more pronounced trend decision in equities has been an exercise in futility for the past several weeks, there is a natural technical and psychological tendency to resume more aggressive price movement after any sustained resting period. DJIA has been trapped in a 250 point range for the past several weeks at the top of a 4,000 point rally. Typically this can only go on so long before the next strong trend ensues; especially as it is up against a particularly significant trend decision area at 10,500. As noted previous, key lower interim and major supports are 10,300 and the 10,100-10,000 range. 

▪  Beyond that, other multi-asset class decisions remain consistent with the influence of last Friday’s US Employment report and subsequent influences. Those include the Gold failing, bonds weak, the US dollar strengthening and continued weakness in energy. The US Dollar Index has maintained its incremental strengthening from .7450-30 support while December Gold’s radical upside acceleration came crashing back down below major 1,200 oscillator resistance.

▪  Even more important is the significant change in the govvies trend, most pronounced in the US and UK on the failure of supports that is not quite occurring in Europe as yet. T-note is approaching more important support at 119-00 in the December contract and in the 117-16 area in the March.  Even more radical was the failure of December Gilt 119.00-118.70 (March contract equivalent of 117.40-.10), and those are now nearing important supports at 117.00 in the December contract and the major 115.35 lead contract low (from back in July) in the March contract. Below those levels each of them can drop another couple of points.

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