Home > Uncategorized > 2013/10/17: TrendView VIDEO Analysis: Equities, Fixed Income, FX (early)

2013/10/17: TrendView VIDEO Analysis: Equities, Fixed Income, FX (early)

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

TrendView VIDEO ANALYSIS & OUTLOOK: Thursday, October 17, 2013 (Early Day)

131017_SPZ60_GLOBAL_0800

 

 

 

 

 

EQUITIES & FIXED INCOME

The TrendView Video is from prior to the US equities opening this morning and S&P 500 future Regular Trading Hours. Yet it remains very relevant for the trend evolution in the various asset classes beyond the initial reactions to the critical resolution of the immediate budget and Debt Ceiling problems in Washington DC yesterday evening. We will also be providing a Commentary post later today with multiple video clips from well-regarded sources that reinforce our view of why the markets have reacted as they have. We touch on those points in the macro factors discussion at the beginning of this video.   

But for now, the timeline of the Equities and Fixed Income portion of the video opens with that typical discussion of macro (i.e. politico-economic) factors shifting into discussion of the short-term and intermediate-term view of the December S&P 500 future at 03:15, with mention (no charts) of the other equities from 06:30, and the important govvies analysis beginning at 07:00. The foreign exchange timeline is noted below.

The Weekly Report & Event Summary Perspective is now available via the right-hand sidebar link

FOREIGN EXCHANGE timeline below.

FOREIGN EXCHANGE

The Foreign Exchange section of the video opens with the US Dollar Index at 09:00, moving onto Europe at 11:00, Asia at 13:55, and analysis of the cross-rates at 16:00 prior to a brief return to December S&P 500 future at 18:15.

General Market Observations

Not a huge surprise that the equities had spiked up yesterday in anticipation of prospects for moving a bill through Congress that resolved the US budget and Debt Ceiling impasse. All the reasons for that have already been reviewed in previous posts over the past several days. The bottom line is that the right wing Republicans finally realized what their more adept party members told them at the outset of their attempt to repeal Obamacare as part of a budget negotiation: it wasn’t going to work, and it was ultimately going to damage The Republican Party.

For whatever reason (and we laid out one of the most critical at the end of Tuesday’s Commentary), they finally decided to stand down. Yet this is not a panacea for the markets. As the compromise coming out of the Senate only sustains the budget funding into January and the Debt Ceiling into February, we can expect quite a bit more politicking into late this year. And along with the not insignificant damage the 16-day shutdown has wreaked on the US economy, that will no doubt still affect the markets.

December S&P 500 future 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.

EXTENDED TREND IMPLICATIONS

The other equities were also up above key resistances once again, yet are easing back a bit in the wake of US weakness this morning. Like strong sister DAX gapping above its 8,770 high with oscillator resistance not until the 8,900 area, FTSE above heavy 6,400 area congestion and even the 6,500-30 area, yet still struggling with the 6,600 area congestion. And the NIKKEI is back up above 14,400-14,500 congestion on the positive outcome of the US Congress’ shenanigans, yet with heavier congestion up in the 15,000 area.

The stronger December US T-note future has put on quite a show, holding not much worse than the low end of 126-00/125-21 near term support yesterday prior to shooting up above it on various factors. As we had already noted the degree to which the equities would not likely be a runaway bull just because the US crisis had ebbed, so too is the T-note capable of rallying. There is both the weakening of the US economy engendered by a 16-day shutdown, and the significant continuation of Fed QE this will encourage. If it wasn’t inclined to taper in September, what possible reason could it have to do so between now and (now very likely) the end of Q1 2014? Next resistance is once again the low-mid 127-00 area.

And 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 yet held down into 109.20-108.75 support. That’s important because next lower support is not until the 108.00 and especially 107.50 areas. It is the same for the previous strong sister December Bund future unable to maintain recent rallies above 140.10-.30, and slipping below 139.60 Tolerance of that area. Yet it also held the 139.00 area, and is back up around 139.60. And that makes it seem like the US is merely the most prominent example of the potential we noted previous for govvies to be buffered by the economic weakness created by the US government shutdown impact on other businesses as well (not to mention the general psychology.)

And as we also cautioned previous, the foreign exchange seemed to be less than impressed by the strong equities activity as well. And that was 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 had still only managed to squeeze up around the initial late-September .8065 ‘dead cat’ bounce high. And that was part of trying to Break UP from a very shallow (i.e. unconvincing) daily chart Inverse Head & Shoulders Bottom. As that has now blatantly failed, it points toward a desire to knock out the .7950 Tolerance of that area. That could easily foment at least a limited further break to the .7860-00 September 2012 trading low and hefty historc congestion.

That is consistent with EUR/USD only back hanging around 1.3500-1.3450 prior to pushing up again; violating its own ‘counterpoint’ Head & Shoulders Top (i.e. it would have had to fail below 1.3450 to put in a meaningful DOWN Break.) That points to a retest of the 1.3710 early year high, or a violation that carries up to either 1.3860 or even 1.4000 area resistance. Likewise the GBP/USD DOWN Break below 1.6000 is now being Negated after not Closing below the low end 1.5950-00 support in that area, and AUD/USD was still Closing higher each day since last Tuesday in spite of the US equities strength, now escaping above its key low-.9500 resistance for a likely swing to .9700 area. Even weak sister Japanese yen saw USD/JPY fail once again from 98.85, even if it is much more of a trading range than trend at this point with key lower support still in the 97.00 area.

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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