Home > Uncategorized > 2013/10/14: TrendView VIDEO Analysis: Equities, Fixed Income (after the US Close)

2013/10/14: TrendView VIDEO Analysis: Equities, Fixed Income (after the US Close)

© 2013 ROHR International, Inc. All International rights reserved.

TrendView VIDEO ANALYSIS & OUTLOOK: Monday, October 14, 2013 (after the US Close).

131014_EQ_FIXED_1530EQUITIES & FIXED INCOME

The TrendView Video is from after today’s US Close, and we have chosen to add a view on the govvies due to their weakness today in the wake of the equities strength. The timeline of this Equities and Fixed Income video opens with the typical discussion of macro (i.e. politico-economic) factors and shift into a short-term trend view of the December S&P 500 future at 2:30, followed by the intermediate-term assessment at 05:10, govvies analysis beginning at 08:50, and a brief return to the December S&P 500 future from 12:20.

The Weekly Report & Event Calendar is available via the right-hand sidebar link

General Market Observations

Not a big surprise that the equities strengthened after the negative US opening this morning when the US budget and Debt Ceiling negotiations shifted once again from Agony to Ecstasy (with apologies to Irving Stone for the parody.) All the reasons for that are better reserved for a Commentary we will be posting tomorrow morning on how excesses on both sides are now being abandoned in favor of a more amenable approach.

While that is especially true of the US Senate, it will be harder for the right wing Republicans in the House to sustain their rigid view. They (and by extension their party) have already been the target of more bad feeling over the partial US government shutdown than the Democrats, and failing to agree to any sort of reasonable compromise which then leads to a US Debt Ceiling failure would be a further major problem for their prospects into the 2014 midterm elections.

As such, it was very interesting that after the December S&P 500 future failed back below the 1,688-1,695 weekly Exhaustion Gap Top on the opening today, it was able to recover back above it and make a new current recovery high by lunchtime. This may have been driven by the factors noted above, yet was also impressive in the manner it represented a reversal of the short term trend indication weakness that had set in early today.

Beyond that, by overrunning that Exhaustion Gap it is signaling that the 1,695-88 area is now support (i.e. Negated resistance), and for all manner of reasons reviewed in the TrendView Video it is now entitled to revisit or exceed the 1,730 previous lead contract high from back in mid-September. While it stalled on the Close at the early August 1,705 high, that is a minor interim level at this point on the way to that old high, or the oscillator resistance somewhat above it into the 1,735 area into next week.     

EXTENDED TREND IMPLICATIONS

The other equities were also up above key resistances once again, like strong sister DAX above the mid-upper 8,600 area and approaching its 8,770 high, FTSE somewhat above 6,400 yet still no better than the 6,500-30 area that will be important tomorrow, and the NIKKEI back up to only test the 14,400-14,500 congestion, which will also be important Tuesday.

The stronger December US T-note future has still held no worse than the low end of 126-00/125-21 near term support. Yet that remains critical for the other primary government bond markets which have been a bit weaker than the US. The December Gilt future finally slid below held its 110.20-109.84 support after pushing into the upper-110.00 area again last Wednesday. It is the same for the other strong sister December Bund future unable to maintain recent rallies above 140.10-.30, and now slipping below 139.60 Tolerance of that area. And the reason that is important in each of those cases is that the next significant support is not for approximately a full point lower if they cannot recover back above those supports. All of that is also in the context of the daily MACDs having turned slightly DOWN in the past few days as well.  

And the foreign exchange still seems to be less than impressed by the strong equities activity as well. And that is likely at least as much due to the problem emanating from Washington DC previous, and the degree to which those shenanigans now weaken the previously leading US economy a bit even if a Debt Ceiling Debacle is avoided. The US Dollar Index has still only managed to slip back from a squeeze near the initial .8065 ‘dead cat’ bounce. And that was from our long-anticipated test of the .8000 area in the wake of the FOMC Surprise, even if it also held the .7950 Tolerance of that area. There is also more formidable resistance waiting in the .8100 area.

That is consistent with EUR/USD only back hanging around 1.3500-1.3450 prior to pushing up again, GBP/USD even on a DOWN Break below 1.6000 not Closing below the low end 1.5950 support in that area (with even heavier support back at 1.5750-00), and AUD/USD still Closing higher each day since last Tuesday in spite of the US equities strength, remaining near the next key low-.9500 resistance.

The balance remains much the same as last Thursday’s Current Rohr Technical Projections – Key Levels & Select Comments available via the link near the top of the right-hand column.

Thanks for your interest.

p.s. As we are just back to blogging after a lengthy hiatus, some of the information on the blog is a bit dated. We will be clearing that up soon, and all of the current critical information (Calendar, Perspective, Technical Projections) is up to date.

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