2015/11/13 TrendView VIDEO: Concise Highlights (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Friday, November 13, 2015 (early)
Concise Highlights
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. As we have noted all week, there was an entirely different indication Monday morning from the OECD (Organization for Economic Cooperation and Development) Economic Outlook and Interim Economic Outlook. And it was quite downbeat, mirroring the slippage into atypical negative outlooks in all of its recent monthly Composite Leading Indicators. If you have not done so already, it is worth a look.
And that plays right into the central bank cross currents we noted Thursday morning were hitting the equities after December S&P 500 future tried to push back above 2,080-75 on Wednesday with no success. ECB’s Draghi was at the European Parliament noting more weakness there than previously acknowledged, yet Yellen & Co. was sharing views that left the impression the FOMC was likely ready to finally raise rates at its December meeting. Obviously the combination of worries about Europe and other economies while the Fed seems likely to raise rates is not positive for equities. The technical failure in the equities (revisited immediately below) seems a ‘good news is bad news’ function now.
That raises a real question over what the market response might be to the more than a bit critical US Retail Sales report. After sagging on much better US Employment indications last Friday (including the first real improvement in Hourly Earnings for quite some time) and better than expected US Wholesale Sales on Tuesday, will a strong US Retail Sales report be positive for equities? Or will it create more Fed dread regarding December?
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Video Timeline: It begins with macro (i.e. fundamental influences) mention of the factors noted above along with strong Employment figures spreading elsewhere. While that might be a sign that Q4 will be the recovery many have been anticipating, the next key indication will be whether that is constructive for equities if central banks lessen accommodation.
It moves on to S&P 500 FUTURE short-term view at 03:00 and intermediate term at 05:45 with OTHER EQUITIES from 08:45 and only mention of GOVVIES from 12:15 including discussion of the BUND at 13:30, and SHORT MONEY FORWARDS from 14:00. Foreign exchange is also only mentioned, with US DOLLAR INDEX at 14:30, Europe at 15:00, ASIA at 16:00 and CROSS RATES showing weakness of the British pound at 17:00 prior to returning to the S&P 500 FUTURE short term view at 17:45.
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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.
▪ While there is much to discuss on the macro background factors, we are developing a more major Extended Perspective macro background view that will be posted soon. That will go beyond the OECD assertions to other important anecdotal and statistical perspectives. IN the meantime we are going to proceed with a brief, purely technical discussion this morning due to the equities (with the US leading the trend) being so fraught after this week’s selloff.
▪ In the event the December S&P 500 future did no better than fail up near 2,100 in spite of the strong indication on last Friday’s US Employment report. More telling was holding the support back into 2,080-75 in its immediate wake only to violate it on the opening this week. And Wednesday’s attempt to push back above it failing left it vulnerable once again.
That showed up in Thursday morning’s 2,058 DOWN Break below its major daily up channel (from the late September 1,862 significant selloff low.) That also violated the previous 2,060-58 congestion, which now sees it down into more critical major early-mid 2015 2.040-35 congestion. If it should fail, then the key 2,020-10 range (Major violated weekly channel DOWN Bread and September FOMC meeting trading highs before the selloff) as the next significant support. This will likely also provide the leadership for the trend in all of the other equities.
▪ The govvies all broke DOWN below interesting supports in the wake of last 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 from which it is also recovering.
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. Yet without even needing to test lower support down into the 154.65-.30 area key Fibonacci level and congestion it held the 155.00 area significant weekly up channel (from the major lead contract 148.23 early June low set by the September contract shortly after becoming front month.) Now back above 155.20-.50 to challenge the 156.20-.50 area once again is very critical; it is also now last week’s major daily up channel DOWN Break (156.25.) If it can remain above it, 157.50 remains interim resistance with more major resistance at the recently tested 158.50.
▪ The foreign exchange is also fraught right now, with the US Dollar Index above .9775 finally 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 last week (impacted by both the BoE Thursday and US Employment Friday) triggering a similarly important weekly channel 1.5265 DOWN Break. Yet rather than drop too much further right away, it was only quietly trading below 1.5150-00 support, with next support as nearby as 1.5000 and 1.4850-00. Back above 1.5150-00 in spite of the Fed minions somewhat hawkish comments looks good, yet still leaves 1.5265 DOWN Break as the key higher resistance.
▪ All the rest remains much the same as previous and as discussed in the Thursday in Wednesday morning’s Global View TrendView video post and Market Observations.
The TrendView VIDEO ANALYSIS & OUTLOOK is accessible below.
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