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Global Market Outlook:
No Relief For Global Equities
Equity Futures: Dow -9.00. S&P -1.80. NASDAQ -4.25. Japanese Nikkei +12.00. German Dax +9.00
Asian trade: Asian markets declined at a strong pace in Friday trade, reflecting the activity seen in the U.S. session that came before. The Nikkei took the strongest hit, plunging 2.50%, closely followed by the Hang Seng index, which fell 2.30%. With the selling seen during the last week of trading, the Nikkei fell to the lowest value in two months.
However, not every market in Asia declined at the same strong speed as the Nikkei. Philippines’ PSE Composite Index fell only 0.30%, while Pakistan’s Karachi SE 100 Index declining 0.35%.
The S&P futures saw a very light momentum during the Asian session, having a range of only 3 points. The futures market is now trading just above the 1024.00 area, the same place where the market bottomed in late Thursday trade.
S&P Futures Technical View: TheLFB Member Charts
Weekly chart trend: Mixed. Main price points: 665.50, and 1252.50. Looking for: 50% Fibonacci level
S&P futures are still bullish on the weekly chart, after a powerful bounce off the 665.50 support area that was established at the start of this year. This recent uptrend could be a pull-back in wave 4 of a bearish impulse count, with wave 5 yet to come. In this case, wave 4 must not overlap the territory of wave 1, shown below (1252).
The converse technical view is that it may also be a start of a new long-term uptrend, if we consider a possible three wave structure from the 1586 top to the 665.50 lows.
Sector Moves: Every sector traded in the red in Asia, as the major indexes declined at a strong pace. The biggest declines could be seen in the companies that have a reliance on their exporting markets, since some market participants are starting to price in a lower growth rate for the global economy. In the Nikkei, just a small number of companies managed to stay above the break-even line, but every share from the machinery, carmakers and steelmakers sectors declined. In the Hang Seng index, almost every sector declined close to 2%, something that denotes the magnitude of the sell-off.
Economic Moves: During the Asian session, the Ministry of Internal Affairs in Japan released a report on the country’s unemployment. The report showed that Japanese unemployment came down from its record high of 5.7 percent which was seen during August and has beaten analysts estimates of an increase to 5.8 percent to come in at 5.5 percent for the month.
Crude oil for October delivery was recently trading at $70.20 per barrel, lower by $0.60. Crude oil moved again flat during the Asian session, but this is likely to change as the market is heading towards the NFP report. On Thursday, crude oil denoted strong positive momentum and even managed to close the day flat despite the selling seen in the U.S. market.
Crude oil Technical View: TheLFB Member Charts
Weekly chart trend: Mixed. Main price points: 33, and 74.90. Looking for: Wave 2)
On a weekly Oil chart we are still looking for a corrective pull-back down to Fibonacci support levels, where wave 2) may find the bottom. Wave 2) is a corrective wave, which means we can expect very slow and choppy price action on the down-side over the coming weeks, where falling prices must not break through the 33 low, while the market trades below 74.90 high.
Gold for October delivery was recently trading lower by $0.30 to $1001.00. Gold is currently trading just above the $1000 benchmark level, but still inches away from the 20-day moving average. In order to move higher from this level, gold would need positive equity markets and dollar weakness.