Home > Uncategorized > Brief Update: 2010/02/05: Equities Less Concerned About Economics and More So Global Deleveraging

Brief Update: 2010/02/05: Equities Less Concerned About Economics and More So Global Deleveraging

▪  What news we have seen this morning has been mostly positive with one troubling major exception: an abysmally weak German Industrial production (DEC) that was estimated to come in up 0.6% on the month instead of an actual -2.6% (and -7.1% on the year as well.) Yet, the question remains whether positive figures make any difference a current environment where broader concerns about credit pervade everything from global sovereign debt dilemmas to the real sense of well-being of consumers, especially those in the US who are impacted by continued weakness in housing.

▪  …important right now are key near-term resistances, such as DJIA failed support in the 10,300-10,230 range, March S&P 500 future just missing previously important 1,102-08 on its recovery back above 1,080-75, and weak sister March NASDAQ 100 future squeezing back above its critical 1,782 yesterday only to drop right back below it yesterday morning. And in fact, due to the S&P 500 future being the more balanced trend indication between the resilient DJIA and abysmally weak NASDAQ 100 future, that violated support in the 1,080-75 area is the key to whether any initially friendly response to the US numbers this morning will amount to anything more than another temporary short squeeze.

▪  if the March S&P 500 future cannot claw its way back above 1,080-75, it will be very vulnerable to further significant weakness into lower supports. While there is an interim range at 1,050-42, the far more major support is not until 1,025-15. Commensurate activity will likely be the case for all other asset classes.

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