Home > Uncategorized > 2012/01/20: Further Evolution of Critical Macro-Technical Decision on S&P 500 Stalling

2012/01/20: Further Evolution of Critical Macro-Technical Decision on S&P 500 Stalling

© 2012 ROHR International, Inc. All International rights reserved.

There is a very interesting fundamental context in markets right now, and even in light of the price activity yesterday in other equities and asset classes much still rests with the S&P 500 future decision into the key 1,310 area resistance. The background on that is the same as yesterday’s post. So, very brief today, simply adding some evolution of the technical trend observations to that extensive previous trend analysis.

The US is still leading the other equity markets higher, which is part of what makes the March S&P 500 future decision so critical with the DAX and FTSE 100 obviously still lagging in spite of pushing above their near-term resistance of late. And before getting to the govvies and the US dollar it is important to note that both the Gold and Crude Oil are sagging in spite of the US equities resilience. Which highlights another interesting twist to the entire range of intermarket activity right now.

Beyond the precious metals into the industrial harbinger of what’s happening in the real economy, March Copper future has also had quite an upside run due to improved economic data. At the top of the week it exhibited a Breakaway Gap UP Break above 3.66, and has (not surprisingly) pushed up rapidly. However, that has left it up at its mid-September weekly gap lower in the 3.80-3.92 range, which is also formidable resistance around the bottom of its first half of 2011 trading range. Therefore, the industrial metal indication that would coincide with and reinforce the equities uptrend as an indication of much stronger economic activity is only on the cusp.

General Market Observations

The other very interesting development is that in spite of seemingly more constructive indications out of Europe, euro is sagging again without even reaching key resistance. Even though the US Dollar Index weakened off below its near-term .8050-30 support, it is right back up there. More critical support remains the .7950 area major channel UP Break. It is also the case EUR/USD rallied back above its major 1.2860 January 2011 low, yet with formidable resistance is still up in the mid-upper 1.3000 area that it has failed to even get near so far.

EXTENDED TREND IMPLICATIONS

Similar violation of near-term support is also apparent in European government bonds, but not in the US govvies as the March T-note has held so far no worse than 130-16 area. March Gilt future on the other hand violated its short-term support in the 116.50 area, and is now down near interim 115.50 support with more major support in the 115.00 area. Similarly in the March Bund future, key short-term support at 139.30-.20 was violated yesterday, with not much of a surprise this fomented another full point selloff.

Yet, in this case as well for the bi-polar Bund (exhibiting rapid vacillations between strong sister and weak sister status) this is not yet totally convincing. Ultimately extended support in the mid-137.00 area would need to fail to establish a full intermediate term trend reversal. Along with all that as a final note on those extended supports, March T-note future would also need to violate its lower support in the 129-24 area for confirmation of a more sustained trend reversal.

Thanks for your interest.

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