FRX: lobal Confidence Sends European Markets Higher
Global markets found the strength to trade in the green on Tuesday morning, extending the rally started in March. The Asian session was relatively flat, but the market experienced a strong pick-up in momentum and volumes in futures market trade ahead of the European open. The gains seen in the equity markets during the European session added strong weight to the currency and commodity markets, sending them to the highest value of the last few days of trading.
European Trade: The European markets added approximately 1% during the first part of the session, with the emerging markets slightly outperforming the developed markets, again. The European blue chip companies gained almost 1%, while the major Eastern-European companies advanced around 1.20%, the strongest performance of the last few days of trading. Helped by today’s surge, the European shares cap the declines seen in Monday trade, and approach the high of the current year once again.
S&P Futures: The S&P futures gained 5 points during the European hours, after a relatively flat Asian session. They found the strength to break above the 1065.00 area, where an intra-day resistance trend-line that has been holding the future index for almost four days now came into play. The next target to the upside is the 1070 area, where the index topped during the last few days of trading. A test of the 1070.00 level would pull the dollar index down to test 75.00 support, thereby empowering the euro and the rest of the major currencies.
S&P Technical View: TheLFB Member Charts: S&P Futures This is one of three charts posted daily the Dollar Index, and one of thirty available each day for LFB members that cover global equity, oil, gold, dollar index, plus six major currency pairs.
4 Hour chart trend: Short possibilities. Main price points: 1070, and 1085. Looking for: Break through the trend line support.
S&P futures have bounced from the lower support line of the trading channel recently, which drove the Us dollar lower against the majors in the last two sessions. Traders should definitely not look on the short side of the market yet, as this bounce may be the key for another move into new highs before the bears will be show themselves. Any break and hold of the 1070 highs will put a new target of a fifth wave into play, somewhere around the 1085 Fibonacci resistance area.
Sector Moves: Every sector advanced in Europe, as the market enjoyed very strong overall momentum. In the German Dax, every company out of the 30 members traded in the green, which is an absolute first for the last few weeks of trading. The best performing companies in Germany were Deutsche Lufthansa AG, with an impressive 4.2% advanced, MunichRe, Daimler and Volkswagen. All four companies surged after analysts upgraded their price targets or recommendations. In the U.K. FTSE, the commodity stocks added strong upside weight on the index, following the dollar’s overnight declines.
Economic Moves: The economic calendar houses two red flag releases, Canadian 08:30 EDT Core Retail Sales Exp. 0.1% Pre.1.0%, and New Zealand 18:45 EDT GDP Exp.-0.2% Pre.-1.0%. Ahead of Wednesday interest rate decision and statement from the FOMC the market has very little macroeconomic data to work with.
Crude oil for October delivery was recently trading at $70.40 per barrel, up $0.75. Crude oil was mainly pulled higher by the weakness that the dollar index showed overnight. This comes only a day after crude oil plunged $3, the most over the last period.
Crude oil Technical View: TheLFB Member Charts: This is one of three charts posted daily the Dollar Index, and one of thirty available each day for LFB members that cover global equity, oil, gold, dollar index, plus six major currency pairs.
4 Hour chart trend: Short possibilities. Main price points: 67.00, and 73. Looking for: Move lower
On a four hour chart, oil prices slid very calmly in the last few days, after touching the 76.4% Fibonacci resistance area, around $73 per barrel. The prices have recently reached the support line for a third time in September, where a possible break-out will signal for a move lower into the powerful red wave III) leg. The prices however, need to stay below the 73 resistance area until the break-out appears, otherwise the corrective count of the red wave II) will be invalidated.
Once the 69.00-69.50 support line is taken out, we will be looking for a black wave i lows somewhere above the 67 area.
Gold for October delivery was recently trading up by $9.90 to $1014.80. After a very thin Asian session, crude oil jumped nearly $7 during the European open, to test the 1015 area. For now, the test was rejected, but if the dollar index keeps declining, while the S&P futures stay in the green, the precious metal is likely to break above this price point.
