Global Market Wrap: Equities Lower In European Malaise
Equity Futures: Dow -9.00. S&P -1.30. NASDAQ -5.75. Japanese Nikkei -2.00. German Dax -15.00.
European Trade: The regional European indexes lost an average 0.50% in Thursday morning trade, reflecting the market’s uncertainty ahead of important interest rate decisions, coming from the Bank of England and from the European Central Bank. In addition, the sell-off seen during the last few minutes of the U.S. cash session had a negative contribution to the global equity markets, sending both Asian and European shares lower.
Currently, every stock market in Europe is trading in the red, with the emerging and the developed equity markets moving hand in hand. The German Dax and the U.K. FTSE have shed around 0.50% until now, while the Nordic markets, as tracked by the DJ STOXX Nordic TMI, fell 0.70%. At the same time, the DJ STOXX Eastern European 300 index lost 0.30%.
S&P Technical View: TheLFB Member Charts
4 Hour chart trend: Short. Main price points: 1025, and 1069.75. Looking for: Move lower
S&P futures traded higher yesterday, in perfect technical fashion, with the recent turning point between the 1055-1065 areas, as discussed. The red wave IV we were waiting on looks complete now and suggests a move lower over the next few sessions.
As such, an expected wave V may fall down to the 1011 target zone while the market trades below the 1069.75 resistance area. Wave V confirmation comes in a 1025 breakout.
Sector Moves: The heavyweights financial and basic resources companies acted once again as a drag on the European equity markets, with both sectors losing around 1%. The financial sector declined after Zurich Financial Services missed analysts’ estimations. The raw materials companies, especially miners, declined after Vedanta Resources also posted lower Q3 profits. Moreover, the selling in the raw materials sector was amplified by the declining metal prices.
Economic Moves: The market is preparing for the BoE and for the ECB interest rate decisions, scheduled at 07:00 EST and at 07:45 EST respectively. Soon afterwards, investors will shift their attention to the ECB Press conference, which historically, is known to create volatility in the market, especially in the foreign exchange arena. The expectations are relatively low for the ECB, which is expected to retain the same signal as in the prior few meetings. However, the BoE is expected to increase the size of the asset buying program, up to £225 billion, something that may already be factored in to the market’s price.
At the same time as the ECB Press Conference, the Canadian Building Permits and the U.S. Unemployment Claims will also hit the newswires.
Crude oil was recently trading at $80.00 per barrel, lower by $0.40.
Crude oil Technical View: TheLFB Member Charts
4 Hour chart trend: Long. Main price points: 76.47, and 82. Looking for: Break through 81.95
The market is still pushing oil prices higher, and our wave V) of larger wave V looks to be developing. A break of the 81.95 wave III) top may appear over the next few session, which should be the key for a move near to the 84 target area.
The current wave count stays valid so long as the market trades above the 76.47, wave IV) support.
Gold was recently trading higher by $2.40 to $1089.70.
Gold Technical View: TheLFB Member Charts
4 Hour chart trend: Long. Main price points: 1026, and 1110. Looking for: Wave 5)
On the four hour gold chart, the blue wave III may already be completed around the 1095 area, as the market trades slowly lower. As such, traders may look for a wave IV corrective pull-back before another push higher of the final wave 5) appears. Target of this move (blue wave V), will be somewhere around 1010.