Home > Uncategorized > 2012/06/26: Quick Post: Weekly Calendar and Perspective along with whipsaw potential

2012/06/26: Quick Post: Weekly Calendar and Perspective along with whipsaw potential

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

Our Weekly Report & Event Calendar is available through the link in the right hand column. Focused comments on the implications for this week are now also available as well below it in the calendar section as the Summary Perspective on Key Influences. We hope you find that useful as well.

It contains the opening summary of why European and central bank influences were almost assuredly going to weigh on the equities in the second half of last week. It also has the Concise Market View at the end, which points out the key levels for the equities that are probably also the overall driver for market psychologies in the other asset classes.

Most important though is the key to a potential sharp whipsaw in the second half of this week…

 

…whether the US Supreme Court is going to overturn the key ‘individual mandate’ (forced purchase requirement) of the Affordable Healthcare Act. Yet, even if they do so and the equities react favorably to the removal of this heavy weight on the private purse, there is still Europe to worry about into the end of the week. As such, the likely friendly equities response to the Supreme Court decision on Thursday will be countered by any lack of significant agreement coming out of the conclusion of the European summit into Friday afternoon (European time; lunchtime in the US.)

General Market Observations

The lack of September S&P 500 future strength above its major 1,350-55 technical congestion last week led to the failure back below the 1,338 Tolerance of that support. Even consideration of the most favorable response to the Supreme Court decision noted above might only bring a reaction back up to that Tolerance level. And while the lowest of the 1,322, 1,310 and most importantly 1,297 supports might be holding for now, we are doubtful the 1,300 area will hold in the event of anything less than a major agreement out of Europe into Friday.

A failure of that sort back in mid-May is what brought the market down to the obvious next major support in the mid-1,200 area prior to the recent recovery. And we suspect that the 1,260 support or even its close counterpart at 1,245 are likely to be seen in the wake of any failure below 1,297.

EXTENDED TREND IMPLICATIONS

In addition to the equities failure last week, other risk assets and markets also came back under pressure, like the EUR/USD failure on the test of 1.2750, commodity currency Australian dollar nearing AUD/USD 1.0250 prior to dropping back to the 1.0000 area, August Crude Oil future slipping further below its violated 85.00 support and the more major 80.00-79.50 prior to holding next support at 78.00, and August Gold future gapping below important 1,615-00 support, which signals it senses more of a deflation risk than any crisis ‘haven’ bid returning in spite of the disturbing talk out of Europe.

Also of note in the primary government bond markets, strong sister turned weakling September German Bund future held slightly above its critical 140.00 area support (with a Tolerance to 139.60) for a good-sized rebound, even if other primary government bond markets remain quite a bit stronger. And that is another area that may be subject to a whipsaw on its counterpoint activity to any dramatic two-way swings in the equities.

Thanks for your interest.

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