Home > Uncategorized > 2011/12/07: Quick Post: Technical Projections and Comments Now Available

2011/12/07: Quick Post: Technical Projections and Comments Now Available

© 2011 ROHR International, Inc. All International rights reserved.

The Current Rohr Technical Projections – Key Levels & Select Comments (as of Tuesday’s US Close) are now available through the link in the right hand column. We have summarized some of the most interesting and telling tendencies below.

 

All of the trend evolution is consistent with our recent discussions of shifts in the inter- and intra-asset class trend influences and technical tendencies. We refer you especially to the previous upside leader December German Bund future having spilled through 137.00 and 136.00 supports all the way to the 133.30-132.89 area while the T-note remains relatively buoyant and the and Gilt positively powerful. So much for the strong economy weighing on govvies, as the UK has experienced more negative data this week. The whole exercise is not only impressive for the massive divergence but also for the Bund having been down near what is the key 132.89 low that might signal a DOWN Break from a major Double Top.

However, that is also very much akin to the dilemma of the equities bears coming in last week. For all of the success in knocking the December S&P 500 future all the way from the 1,240-30 failure straight down to the next major 1,155-45 support, the burden of proof was on the bears into that mid-1,100 support. Will the Bund remain bearish enough crack that 133.00 area support in a meaningful way? Well, it’s going to need to be pretty bearish, because the downside Objective is 127.60. As it is such a major decision, whether and with what sort of momentum the March Bund future (front month as of this Thursday) breaks below 132.89 bears close scrutiny.

And it is interesting that the Bund is the hands down weak sister after such a long sojourn at the top of the ‘haven’ bid pile. However, that was always likely that once fiscal concerns were more prominent due to the weak European economics that would normally be a tonic for the govvies. It is just occurring sooner than would normally be the case, and especially more so than for the other ‘haven’ govvies due to the accelerated intense focus on the European fiscal situation. Yet, that should be a cautionary indication for any who believe the T-note and Gilt will act as endlessly reliable havens during economic or equities weakness; there will likely come a point (even if at quite a bit lower equities levels) where the extreme weakness of equities indicates an economic dislocation that hits the other govvies as well.

The activity in foreign exchange is also an indication that the sharp bear squeeze in equities does not necessarily represent an overall trend reversal; which might carry with it an indication of greater economic strength. If that were so it would be more likely the US dollar would have lost more of its recent ‘haven’ bid that saw it retest upper .7900 resistance. And any real economic improvement should be a tonic for the euro. Yet it stalled no better than around its violated support in the 1.3500-1.3460 area in spite of the more hopeful perspective fromEurope early this week.

It leaves us feeling that short of much more of a solution to the European problems than is likely to occur timely (and we will know more on that after this weekend), the equities are another rally in an intermediate term bear trend. Any December S&P 500 future stallout into no better than the 1,260-70 area maintains recent topping tendencies even when the market manages to get above 1,240-50.

Thanks for your interest.

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