2015/10/21 TrendView VIDEO: Global View (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Wednesday, October 21, 2015 (early)
Global View: All Markets
As noted previous, while this is still curious, it is also not so curious at all on continued equities responses to both weak and upbeat recent economic data. That continues to encourage an erratic yet understandable ‘bad news is good news’ rally, with bouts of perverse weakness on better data at times. The response to this morning’s weak Asian economic data (including Japan’s Trade figures showing export implosion) is for the equities to rally. And this is likely on a transition from ‘FOMC Friendly’ influence into an ‘ECB Friendly’ influence on the way into Thursday morning’s Rate decision and press conference.
Even with last Wednesday’s very weak Walmart corporate earnings and guidance, even further weak economic data Thursday morning encouraged the December S&P 500 future to gap back above the key 1,990-88 area. And on the mid-morning Thursday pullback it only got right to the top of that 1,990-88 range prior to putting on an orderly yet extensive rally to critical resistance. It all gets back to the ‘FOMC Friendly’ anticipation into release of the September 16-17 meeting minutes that continued after their release. And that is in spite of, or possibly because of, the clearly dovish nature of the discussion. Basically the December contract Negated (i.e. overran) the daily DOWN CPR (Closing Price Reversal) from back on that September 17th FOMC announcement and press conference. This was more definitive evidence of the ‘bad news is good news’ psychology. Ultimately that set the stage for also overrunning key resistances at the 2,011, 2,015 and 2,020 levels that now leaves it up near the major 2,035-40 March-July congestion resistance.
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Video Timeline: It begins with macro (i.e. fundamental influences) mention of the weaker data being back almost across the board in addition to factors noted above. However, the addition of OECD Composite Leading Indicators (also discussed last Thursday and in previous posts) reinforces all the weakness in addition to the indications from the FOMC. While there is also the weak influence of global Trade figures, of late some of the data is improving a bit. That includes Michigan Confidence last Friday, Monday’s Chinese data and Tuesday’s US Housing Starts. Yet Japan and Australia data this morning were weak.
It moves on to S&P 500 FUTURE short-term indications at 02:30 and intermediate term view at 05:45, OTHER EQUITIES from 07:15, GOVVIES analysis beginning at 10:15 (with the DECEMBER BUND FUTURE at 12:15) yet only mention of the stable SHORT MONEY FORWARDS at 13:15. FOREIGN EXCHANGE covers the US DOLLAR INDEX at 14:45, EUROPE at 15:30 and ASIA at 17:30, followed by the CROSS RATES at 19:30 and a return to S&P 500 FUTURE short term view at 22:30. We suggest using the timeline cursor to access the 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.
▪ And the equities slippage last Wednesday leading to strength Thursday morning was not that surprising. As we noted ever since erratic activity around the 1,900 area back on October 1st, the short-term failures are historically not likely to remain down in an ‘erratic recovery’ phase of a bear trend. That was very apparent again on the push up to a new high for the overall rally late last week.
As noted previous, in spite of rumors to the contrary, there was no hint in those September 16-17 FOMC meeting minutes that keeping rates steady was any sort of ‘close call’; they were roundly dovish. That pushed the December S&P 500 future back above the 1,990 area DOWN Closing Price Reversal signal from back into and after the actual September 17th FOMC announcement and press conference. Apparently if the news is bad enough, the markets suspect there will be even more Fed accommodation. And that is a good part of the reason why 1,990-88 area was not just a technical trend level: It was also the indication of whether the ‘bad news is good news’ psychology could continue to drive an equities rally. What is now important for December S&P 500 future is whether that psychology is dominant enough to see it hold that key 2,011-2,020 support (i.e. overrun key resistance) on near term setbacks.
▪ All the rest of the overall background remains much the same as the early sections of last Thursday’s Global View TrendView video post and Market Observations below the video analysis. There was also an additional (and atypical) Brief Supplemental Weekend Market Observations below Friday’s Concise Highlights TrendView video analysis. Those were added due to Friday’s December S&P 500 future push up to a weekly Close above the high end of the critical 2,011-2,020 resistance.
The TrendView VIDEO ANALYSIS & OUTLOOK is accessible below.
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