2012/11/20: Quick Post: Weekly Calendar and Perspective: All as expected on equities rally from support

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The weekly Report & Event Calendar along with the Weekly Summary Perspective are available through the links in the right hand column. The Perspective sums up what has been the anticipated reaction to the more cooperative tone of US Fiscal Cliff negotiations convened by the President at the end of last week. As was easy to surmise, both sides of the otherwise highly partisan US Congress were interested in appearing more reasonable. And then the equities were allowed to assume the best as Congress pulled that great European summer holiday trick: they left town. It could just as easily have been August in Europe instead of Thanksgiving in the US.

That came along with somewhat better US data (especially housing) and funding for Greece, which was enough to bring in a very sharp equities relief rally yesterday.  That sent the December S&P 500 future gapping up from last week’s test of 1,350 area back up to the 1,387 Tolerance of the 1,400 area overall congestion. And that is how the “worst case scenario” ending up getting turned around into the sharp rally.

At least for now…

…because even as early as late this week there are European economic releases and important budgetary meetings which might derail the positive psychology. And even if that doesn’t bring any great pressure back onto the equities this week, the return of the US Congress next week to try and pin down the details of the Fiscal Cliff negotiations likely will. The dilemma is that the still sharply divided US parties (and their even more entrenched factions) are more likely to initially express support for their core position than immediately cede any ground. That will likely bring a bit less constructive tone to the equities, and restore some strength to the govvies and US dollar.

General Market Observations

In fact, all of the expected tendencies are being fulfilled in the wake of our assessment in last Thursday’s TrendView BRIEF UPDATE about the equities, and less than full reaction in the other asset classes.  Those were extended into more discussion of the psychology in last Friday’sThe Petraeus Predicament and bye-bye Ho-Ho’s. We suggest the first page of the Summary Perspective and a read of those previous analyses. If you have any interest in the Japanese yen, the Summary Perspective Concise Market View fundamental background assessment might also be of interest along with the charts link at the end of page two of the TrendView BRIEF UPDATE.

Thanks for your interest.