Home > Uncategorized > Weekly Overview: 2010/01/04: Stop-Go 1970’s Style Volatility Likely Means Major Trend Swings This Year

Weekly Overview: 2010/01/04: Stop-Go 1970’s Style Volatility Likely Means Major Trend Swings This Year

▪ While equities became somewhat moribund on Santa Portfolio Manager window dressing late last year, DJIA and S&P 500 can only remain quiet near highs for so long prior to a bigger decision. The same is likely true for foreign exchange markets which have spent a fair amount of time churning sideways. 

▪ Any DJIA 10,600 area UP Break and possible subsequent failure is now well-calibrated to the decision in the March S&P 500 future, as it has not been able to surmount Tolerance into the 1,120-25 range. 

▪ Beyond that, other multi-asset class decisions remain consistent with the influence of better US economic data, yet with weak indications elsewhere. One of the key decisions on equities resilience was weak government bond markets, as March T-note finally violated its 117-24/-16 area support, with failure below the interim 116-20 level leading to the far more major 115-00/114-16 support.

▪ From a technical perspective, the US Dollar Index held in spite of repeated attempts to break it below the important .7450-30 area, and has experienced a .7700 UP Break from its intermediate-term DOWN channel (from the .8150 area high of the mid-June bounce.)

▪ The major week after the holiday break began even before opening bells in the Far East, with some Fed-speak from Messrs. Kohn and Bernanke. It is also going to see the typical first week of the month onslaught of economic data, including OECD Composite Leading Indicators shortly before US Employment report on Friday, and the Bank of England rate decision and asset purchase announcement on Thursday, yet with ECB deferred until next week.

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