Home > Uncategorized > 2013/10/21: TrendView VIDEO Analysis: Equities, Fixed Income, FX (early)

2013/10/21: TrendView VIDEO Analysis: Equities, Fixed Income, FX (early)

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

TrendView VIDEO ANALYSIS & OUTLOOK: Monday, October 21, 2013 (Early Day)

 131021_SPZ60_GLOBAL_0800EQUITIES & FIXED INCOME & FOREIGN EXCHANGE

This is an atypical single TrendView Video (http://bit.ly/1azFmJ2), because so much of the trend evolution out of the end of last week into this morning has been very consistent with our views. So we are keeping it short and simple this morning. The timeline opens with the typical discussion of macro (i.e. politico-economic) factors and short-term December S&P 500 future view. That leads to the intermediate-term December S&P 500 future analysis from 03:30, with the other equities from 05:00, govvies analysis beginning at 07:15, and short money forwards from 11:50. The Foreign Exchange section continues with the US Dollar Index at 13:30, and jumping around a bit to best integrate the cross rate analysis with the US dollar relationships prior to a brief return to the December S&P 500 future at 17:40.

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

 

 

General Market Observations

The general improvement of equities was no surprise in the wake of the constructive resolution (at least for now) of the US budget and Debt Ceiling impasse last Wednesday. The December S&P 500 future rally back from the higher of our lower supports at 1,643 saw it back above both 1,685 and the Exhaustion Gap at 1,695-88. That was a natural fillip for a retest of the 1,730 previous lead contract high from back in mid-September. Yet, exceeding it on Friday’s Close also knocked out oscillator resistance (weekly MA-41 plus 115-120) that now points to an extension to the 1,755 area.

EXTENDED TREND IMPLICATIONS

The other equities were also up above key resistances once again, like strong sister DAX gapping above its 8,770 high with oscillator resistance not until the 8,900 area. FTSE was quickly back above heavy 6,400 area congestion and even the 6,500-30 area, and is now challenging the 6,600 area congestion. And the NIKKEI back up above 14,400-14,500 congestion on the positive outcome of the US Congress’ shenanigans is likely ready to challenge the heavier congestion in the 15,000 area, or even the major May 15,300area DOWN CPR.

▪ Govvies were also very interesting in that context. The stronger December US T-note future put on quite a show, holding not much worse than the low end of 126-00/125-21 near term support last Wednesday prior to shooting up above it. 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 were the T-note and other govvies 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. That was confirmed by Chicago Fed President Evans on CNBC this morning. While he did not say it in so many words, If it wasn’t inclined to taper in September, what possible reason could it have to do so between now and possibly as late as the end of Q1 2014? Next December US T-note future resistance is once again the mid 127-00 area, with 128-16 above that.

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. And on the perception of the weaker US economy and stronger T-note, it has ratcheted right back up into the higher area. 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 into 140.10-.30; which is more critical resistance on this rally than last time (see the video for the full picture.) 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 influences emanating from Washington DC, and the degree to which those shenanigans now weaken the previously leading US economy a bit even as a US 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 historic congestion.

That is consistent with EUR/USD only back hanging around 1.3500-1.3450 congestion and major channel support on its reaction prior to pushing up again; violating its own ‘counterpoint’ Head & Shoulders Top (i.e. it needed to fail below 1.3450 to put in a meaningful DOWN Break.) That pointed to the retest of the 1.3710 early year high already seen, 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 has been Negated after not Closing below the low end 1.5950-00 support in that area. Now also back above (i.e. Negating) the 1.6150 weekly DOWN CPR from several weeks ago opens the door once again to a test of the 1.6300 to 1.6379 major trading range high. AUD/USD was still Closing higher each day since Tuesday two weeks ago in spite of the US equities strength, and escaping its key low-.9500 resistance still suggests a likely swing to .9700 area that is already in progress. 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.

And on the cross rates, that Aussie strength versus yen weakness is a really different action out of Asia. Full review of that is included in the video.

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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