2015/11/10 TrendView VIDEO: Global View (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Tuesday, November 10, 2015 (early)
Global View: All Markets
While some weakness might have been expected at some point after Friday’s strong US Employment report, Monday’s drop from the opening after Friday’s December S&P 500 future holding action in the nearby 2,080-75 support. Some might say this is the natural ‘good news is bad news’ influence from the greater potential for and FOMC rate hike in December. While that is possibly the case, the question is why that did not have more of an impact Friday?
There was an entirely different indication Monday morning which may be more so the culprit in the equities slam, US dollar stalling and the govvies stabilization: the OECD (Organization for Economic Cooperation and Development) Economic Outlook and Interim Economic Outlook. The reason it includes the interim view as well would seem to be the incorporation of monthly Composite Leading Indicators (CLI) into this major semi-annual assessment. And it was quite downbeat, mirroring the slippage into atypical negative outlooks in all of its recent monthly CLI. You can view this extensive review of both the developed and emerging economies at http://bit.ly/1QdIN1J.
Especially of note is the slideshow (enlarge to full screen) and the video of the Outlook presentation. Of particular interest in the press conference video discussion by Secretary General Angel Gurria and others is the focus form approximately 03:00 on the extreme weakness of global trade (we have noted previous), and (from 05:15) the fact that structural reform we have been so focused on all year is the only policy lever left after monetary and fiscal tools have been mostly exhausted. It is an interesting view and read; and distinct counterpoint to the euphoria from last Friday’s US Employment figures.
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Video Timeline: It begins with macro (i.e. fundamental influences) mention of the strength of the US Employment report coming in the wake of other not so strong data earlier on Friday. That said, the economic data had been firmer overall and last Thursday’s BoE Inflation Report press conference was more dovish than expected. And it is important it is all now Q4 data as well. Yet this week’s data has weakened once again on Trade figures as we await US Wholesale Sales today. While there is other important data through the week, we suspect Friday’s US Retail Sales are very critical in the wake of the Employment report.
It moves on to S&P 500 FUTURE short-term at 03:30 and intermediate term view at 06:30, OTHER EQUITIES from 08:30, GOVVIES beginning at 11:45 (with the DECEMBER BUND FUTURE at 15:45) and SHORT MONEY FORWARDS from 17:00. FOREIGN EXCHANGE covers the US DOLLAR INDEX at 20:00, EUROPE at 22:45 and ASIA at 26:00, followed by the CROSS RATES at 28:30 and a return to S&P 500 FUTURE short term view at 31:45. We suggest using the timeline cursor to access analysis most relevant for you.
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Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion and TrendView Video Analysis and General Update. Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion.
▪ As we will be developing another extensive Commentary on the overall fundamental and market situation very soon, we are going to demure from any further background analysis at present. The basic diametric dynamic between the US Employment report economic ‘Ecstasy’ from Friday and Monday’s OECD Economic Outlook and Interim Economic Outlook ‘Agony’ remains a good metaphor for what is transpiring in the markets.
This will soon also be further convoluted by the approach of ‘Santa Claus Rally’ season, or more so Santa ‘portfolio manager’ investment proclivities that we always revisit at this time of year. And in consideration of that more extensive ‘macro’ fundamental economic perspective coming soon, a quick view of the key technical levels after the recent significant price shifts is more useful this morning.
▪ In the event after Friday’s US Employment report the December S&P 500 future slid back down to test telling support back into 2,080-75 after fading previous from the interim 2,100 area resistance. That looked pretty firm on what could have been a worse ‘good news is bad news’ reaction from the greater potential for and FOMC rate hike in December. Yet that being violated so quickly Monday morning seems to point to the influence of that OECD Economic Outlook. Next lower interim support is 2,060-58 (with a Tolerance to the 2,056 selloff low from right after the FOMC statement release), with more prominent congestion back into the 2,040-35 range.
▪ The govvies all broke DOWN below interesting supports in the wake of Friday’s US Employment report. Those include the December T-note future 127-00/126-24, with next interim support at 126-00 and especially telling major support into the 125-16 area. The December Gilt future failing below 117.50-.15 has dropped quickly to the next lower support in the 116.50-.00 area.
As important, the recently more mighty once again December Bund future failed all key areas from 157.50 to 156.50-.20 and even 155.50-.20 (all now resistances.) Yet that still leaves lower support down into the 154.65-.30 area key Fibonacci level, congestion and significant weekly up channel (from the major lead contract 148.23 early June low set by the September contract shortly after becoming front month.)
▪ The foreign exchange is also fraught right now, with the US Dollar Index above .9775 yfinally able to exceed the key .9850 Tolerance of that resistance. That leaves historic resistance into the 1.0039 April high of the current overall up trend, yet with weekly oscillator resistance above that as nearby as 1.0150 area above that. That fits right in with EUR/USD on a weekly channel DOWN Break down below 1.1000 also failing 1.0850-00 historic and recent congestion, with 1.0500 area next support below.
That also applies to the somewhat more aggressive GBP/USD selloff (impacted by both the BoE Thursday and US Employment Friday) last week triggering a similarly important weekly channel 1.5265 DOWN Break. Yet rather than drop too much further right away, it is only quietly trading below 1.5150-00 support, with next support as nearby as 1.5000 and 1.4850-00. And the other currencies, including emerging markets, have also weakened against the renewed King Dollar in the wake of the outsized positive US economic inferences being taken from Friday’s US Employment report.
The TrendView VIDEO ANALYSIS & OUTLOOK is accessible below.
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