Home > Uncategorized > 2013/10/23: TrendView VIDEO Analysis: Equities, Fixed Income, FX (early)

2013/10/23: TrendView VIDEO Analysis: Equities, Fixed Income, FX (early)

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

TrendView VIDEO ANALYSIS & OUTLOOK: Wednesday, October 23, 2013 (Early Day)

131023_SPZ60_GLOBAL_0800EQUITIES & FIXED INCOME & FOREIGN EXCHANGE

This is an atypical single TrendView Video because so much of the trend evolution out of the end of last week into the middle of this week has been very consistent with our views. That said, this is also a very extensive analysis. That is due to so many factors that affect each asset class are spilling over into affecting the other, and we wanted the discussion under one roof (so to speak.)

Due to the length of the video, we strongly suggest you take advantage of the timeline scrolling function at the bottom of the video to proceed to those sections most relevant for you. The timeline opens with the typical discussion of macro (i.e. politico-economic) factors, shifting to the short-term December S&P 500 future view at 04:00 and intermediate term assessment at 06:50. That leads to the other equities from 10:00, govvies analysis beginning at 12:25, and short money forwards from 16:40. The foreign exchange section continues with the US Dollar Index at 18:50, jumping over to Europe at 20:15 and Asia at 22:50, followed by the cross rates at 25:10 and a brief return to the December S&P 500 future at 28:20.

The bottom line is that it is all still consistent with the market context discussed in yesterday’s post on QE-Infinity is good for what ails youunless you’re the US dollar. We expect more of the same, and the govvies are in a particularly critical phase after their recent rally. The fine line analysis is best reviewed in extensive graphical analysis in the video.

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

 

 

General Market Observations

Even as the December S&P 500 future has escaped its 1,735, extended oscillator resistance and already neared the next key threshold in the 1,755 area on that ‘bad news is good news’ QE influence, govvies have rallied as well on the sheer bad news. And the US Dollar Index hasn’t liked any of it (neither the bad news nor prospect of further full-blown Fed QE activity.) Whether the December S&P 500 future can escape 1,755 for an extension to the next weekly oscillator and major topping line resistance in the 1,780-85 area likely rests with whether it can surmount the 1,755 current oscillator resistance on this week’s Close.  

EXTENDED TREND IMPLICATIONS

The other equities were also up above key resistances once again, like strong sister DAX gapping above its 8,770 high and even next oscillator resistance in the 8,900 area. FTSE was quickly back above heavy 6,400 area congestion, 6,500-30, and now even out above more prominent congestion at 6,600 (which should act as support on any pullback.) And yet, its 6,730 area DOWN CPR top from back in May still represents some critical resistance. And the NIKKEI back up above 14,400-14,500 congestion on the positive outcome of the US Congress’ shenanigans was indeed ready to swing toward the heavier congestion in the 15,000 area, yet was derailed by the strengthening of the yen for a current swing back below 14,400-14,500. However, 14,000 to 13,600 still represent hefty support.  

▪ Govvies were also very interesting in that context. The stronger December US T-note future has put on quite a show in holding not much worse than the low end of 126-00/125-21 near term support last Wednesday prior to shooting up above it. After exhibiting a 126-24 UP Break out of a very malformed weekly Inverse Head & Shoulders Bottom last week, it held well on Monday’s pullback prior to pushing above key mid 127-00 area resistance today. Next resistance is not until the 128-16/-24 area 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 above the higher area, with next resistance into the mid-upper 111.00 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 has since exhibited a 140.10-.30 UP Break out of its weekly down channel (see the video for the full picture on those. 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. Once that blatantly failed on last Wednesday’s drop below .8012 (low of its Inverse H&S pattern right shoulder), it pointed toward a violation of the .7950 Tolerance of the .8000 area. That should drive 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 1.3836 or even 1.3950-1.4000 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 congestion to the 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 suggested a likely swing to .9700-50 area. That has already occurred, and it has reacted sharply; yet the overall bull trend remains intact as long as support in the .9500 area or even as low as the .9300 area remains intact. 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. Those will be updated after the US Close tomorrow.

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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