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The full calendar is available through the link in the right hand column. The focused comments below it will be available in the calendar section shortly after the weekly calendar is posted each week as Summary Perspective on Key Influences. We hope you find that useful as well.
For those of you who have not already seen it, there was also a fresh post on Friday regarding an insight into how the current US administration views economic theory and practice: Quick Post: Obamanomics encourages OSD (Occupy Supply-Demand) Movement. It cites an interesting section of Mr. Obama’s mini-speech from last Thursday on repealing oil company subsidies that revealed either a lack of understanding or desire to ignore the basic laws of economics.
It’s a critical mid-week decision horizon this week. Not to say that there are no important influences at the end of the week as well. Especially the truncated US trading session on Friday (fools!!) to allow for a reaction the US Employment report will be telling. However, most of what is potentially radical in the market influences rolls out of heavy central bank releases or activity between Tuesday and Wednesday.
Which may make even something that the electronic financial press is endlessly (often mindlessly) calling the ‘all important’ US Employment report an afterthought by Friday. That’s just a reasonable assessment of the potentials into the European influences Tuesday, and even heavier reports (global Services PMI’s, Euro-zone Retail Sales, etc.) and bumped up ECB meeting and press conference on Wednesday accompanied by European sovereign debt auctions.
So while the important top of the month reports clear from the listings in the calendar are going to be quite influential in their own right, the central bank and finance ministry activities may well be more important as early as mid-week.
There is also quite a bit of variation in the general influences due to the beginning of a new of quarter and other factors. Of course, with equities up since the beginning of the year, there are incentives for portfolio managers with fresh money to not miss the continued bullish boat. On the other hand, there is the historic context of some years with great first quarters ending up not providing any significant further return throughout the year. As important for the sheer amount of liquidity that may want to swing into equities is whether a major asset reallocation is in progress after the sharp weakness of the primary government bond markets three weeks ago. It doesn’t particularly feel that way now. Yet any further progress in equities must be monitored to see if at some point it creates another round of flight from the bond market.
General Market Observations
June S&P 500 future held last week’s washout below the interim 1,400-1,407. Even though it Closed marginally below it on Thursday, it recovered on Friday’s opening.) If it maintains overall upward momentum from that area, next major resistance on historic congestion and oscillators are not until the 1,425-28 area, with the major 1,440 May 2008 high above that. Lower interim (Closing price) support remains 1,394, with more major support below in the 1,375-67 range.
EXTENDED TREND IMPLICATIONS
Even though the June T-note future had pushed back modestly above the 129-00 area, it is now challenging more prominent resistance in the 129-20/130-00 area (major gap lower from three weeks ago and heavy congestion.) We suspect there is not much to inspire further strength in the govvies if the equities continue their push up to higher resistances.
More interesting is further evolution of the recently interrupted secular weakness in the Japanese yen. After stalling at important resistance (yen support) of late, USD/JPY has held multiple tests back down at important support in the 82.25-.00 area (at least so far.) Similarly AUD/JPY held 85.00, an important previous congestion and current up channel and technical pattern support level. And the EUR/JPY has been right back down in the low 109.00 area as well. It looks like the aggressive yen bear is intact as long as those multiple tests of resistance on various fronts continue to hold.
Thanks for your interest.