Home > Uncategorized > 2012/01/18: Quick Post: Technical Projections and Comments Now Available

2012/01/18: Quick Post: Technical Projections and Comments Now Available

© 2012 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.

As noted in yesterday’s post, somewhat more upbeat economic data assisting the equities has also been putting a bit of pressure on the US dollar and primary government bond markets. Yet they have also been quite resilient, not exhibiting any UP trend reversing effects just yet. Adding to the somewhat perverse “it’s all going up together” psychology right now is the strength of Gold and Crude Oil, which would not normally accompany the combined overall up trends in equitiesgovvies and the US dollar all together.

As such, we still see these markets as being very fraught, with the potential for a sharp reversal to the downside in equities a distinct possibility in spite of the early year sustained strength. However, it seems it will take much more of a catalyst than simply the recent (admittedly broadly anticipated) European sovereign debt downgrades to create any sustained equities pressure in the face of improved economic data.

However, the European Sovereign Debt Crisis focus is moving on to the Greek debt deal required to facilitate its next round of rescue funding. That is becoming more critical late this week (with possible extension into next week.) The one factor which might still assist the equities bears is the fact that any chance for a successful Private Sector Involvement (PSI) is falling apart.

There are many who would say that is also something which markets have already discounted. The idea that they will find some way to work it out because “they need to” is specious at best. That is distinctly similar to the discussion last summer over the US debt reduction negotiations. Up to the very end there was a major contingent (present analyst excluded since as far back as last spring) who also believed they could not possibly fail to achieve a successful outcome.

And the equity markets at that time also chose to drink the Successful Outcome Kool-Aid. It will be very interesting to see what happens if that troubled negotiation does indeed come to a bad end over the next week or so, as it will also be right into the G-20 Finance Vice Ministers meeting into this weekend. That’s going to leave a lot of room for dissention based on the comments we are already hearing out of the various players in Asia, the US and Europe…

…and now the IMF has weighed in on its further funding needs to mitigate any fallout from a European meltdown. Fasten your seatbelt.

General Market Observations

This all significantly revolves round the March S&P 500 future continued grind higher. While it has seemed very vulnerable at times, every selloff since the first of the year has held the next higher incremental support; substantially being the extended support around the most recently violated resistance in each case. That began with the gap above the 1,270 area inability to drop back below 1,264 two weeks ago.

And last Tuesday’s gap opening above key the previous Tolerance at 1,280.90 gap resistance was unable to Close back below 1,275.60 (last Monday’s Close from which it gapped up last Tuesday.) That was in spite of the extensive (if temporary) pressure last Friday. It remains the next lower key support. All of which left the door open for a push to the next important resistance at 1,310, which now seems to be in progress.

EXTENDED TREND IMPLICATIONS

Yet, in spite of that, the March T-note future has been unable to get back down to (much less below) its 130-16 support. And similar activity in other govvies even saw a new all-time high for the March Bund future. While backing off in the face of improvement in the euro from EUR/USD 1.2650-1.2550 support, the US Dollar Index has also only pulled back in an orderly reaction from its minor temporary push above .8133-44 resistance on Friday. While the various asset classes all remain more or less ‘up together’ it seems that taking short term views (or preliminary positions for broader trends) until the real catalyst for a bigger decision comes along is the most sensible thing to do.

The same is true for the February Gold future, as its recovery back above the key 1,615-30 resistance range sets that area as likely support even if it now much closer to important upper 1,600 to low 1,700 resistance. March Crude Oil remains erratic in the face of the unsettled Middle East situation, yet has still stalled around the top end of 102.00-103.39 resistance.

Thanks for your interest.

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