2015/11/17 TrendView VIDEO: Global View (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Tuesday, November 17, 2015 (early)
Global View: All Markets
That was quite a rally in the equities. Yet it should not have been totally unexpected as a ‘relief rally’ once it looked like the Western powers-that-be were reacting forcefully to the weekend terror attacks in Paris. It is an open question why more of this was not being done previous where the threat from the radicals was such an apparent ongoing situation. Yet sometimes it takes a sharp catalyst to spur major Western governments into the sort of action that others can already see as necessary. As noted in Monday’s Brief Current Commentary (worth a red if you have not done so already), our sympathy and support go out to the victims of this weekend’s Paris terrorist attacks and their families and friends.
And as the equities are very emotional right now, with a lot of near term ‘velocity’ (versus background volatility), we are going to once again shift into an immediate market trend assessment rather than review a lot of the background. Suffice to say for now that the ‘macro’ factors have weakened again. That was evidenced by quite a bit of last week’s late week economic data, culminating in the once again weaker than expected US Retail Sales. And that was in spite of the previous strong US Employment report and Wholesale Sales data. There is a good reason for that, and we will revisit it soon in a major Commentary.
In the event December S&P 500 future failed up near 2,100 in spite of the strong indication on the US Employment report two weeks ago. More telling was failing support back into 2,080-75 on the opening last week in the wake of the OECD Semi-annual Outlook. And Thursday saw another gap lower that ultimately remained below 2,060-58 for a fresh major daily channel DOWN Break. It is interesting that in overnight trade into this morning it has already traded up into and failed from that area.
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Video Timeline: It begins with macro (i.e. fundamental influences) mention of the factors noted above, and we note the equities recent failure was in spite of recent strong US Employment figures spreading elsewhere. While that might have been a sign Q4 will be the long anticipated recovery , the more recent indications into the end of last week and early this week are less constructive; including Japan sinking back into recession.
It moves on to S&P 500 FUTURE short-term at 02:45 and intermediate term view at 05:00, OTHER EQUITIES from 06:15, GOVVIES beginning at 09:30 (with the DECEMBER BUND FUTURE at 12:00) and SHORT MONEY FORWARDS from 13:15. FOREIGN EXCHANGE covers the US DOLLAR INDEX at 15:30, EUROPE at 16:30 and ASIA at 19:15, followed by the CROSS RATES at 22:00 and a return to S&P 500 FUTURE short term view at 26:15. 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.
▪ 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 continue with the brief, purely technical discussion this morning due to the equities (with the US leading the trend) being so critical after last week’s selloff into Monday’s extensive strength.
▪ In the event the December S&P 500 future held the more major lower support in the 2,020-10 area that was hit by Friday’s Close and temporarily violated in electronic trading overnight into Monday morning. And the market’s ability to push back up so strongly was not that much of a surprise, with the previously more prominent 2,035-40 major weekly chart (March & July) congestion looking more like an ‘over-under’ area (i.e. not able to stop the renewed rally.)
This fit right in with Monday’s Brief Current Commentary view that in the intermediate term human occasional tragedies do not tend to be economic or equity market tragedies as well. There is an assumption that the rebuilding process will require expenditures that will support the economy.
As such, our skepticism of the equities leads to a preference to continue to watch the December S&P 500 future 2,058-60 area closely, even if there are higher resistances back into the 2,075-80 and the 2,100 areas. As far as lower support, 2,020-10 remains the major threshold with 2,040-35 along the way.
▪ The govvies all broke DOWN below interesting supports in the wake of the last 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. And even though they returned to test those areas on Monday, the economic data unfolding from here will be the important arbiter of whether they can rally further to higher resistances.
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 and even the 156.20-.50 area (also recent daily channel DOWN Break) once again, it is challenging 157.50 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 two weeks ago (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 Fed minions somewhat hawkish comments looks good, yet still leaves 1.5265 DOWN Break as the key higher resistance.
▪ All the rest remains the same as previous and as discussed in the Monday morning update of the Market Observations below Friday morning’s Concise Highlights TrendView video analysis (available to all Gold and Platinum subscribers.)
The TrendView VIDEO ANALYSIS & OUTLOOK is accessible below.
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