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Global Market Wrap:
Europe In The Green- 1st Time In Four Days
Equity Futures: Dow -34.00. S&P -3.60. NASDAQ -6.50. Japanese Nikkei +25.00. German Dax -10.00.
After a negative period during the Asian session, European equity futures market advanced a few points around the opening bell. However, this had little effect in S&P futures or in the commodity markets, which have barely moved so far.
European Trade: European markets are trading in the green, led higher by the Nordic markets, with Norway’s OBX up 1.55% and with Finland’s OMX up 0.95%. The Central and the Western European stock markets had a weaker trading session, with Switzerland’s market up a shy 0.10%, while the major indexes from Germany, France and U.K. gained between 0.20-0.30%. The emerging Eastern European markets were led higher by Romania’s BVB, which surged 2.80% from the first few trading hours, being Europe’s best gainer market. However, also in the far Eastern markets, the Russia stock market lost 1.50%, being at this time the only market trading in the red.
During the European session, the market’s focus points where the U.K. and Europe Service PMI reports. Both printed better than expected numbers, but the U.K. PMI saw an excellent 55.3 read, which shows that the U.K. service side of the economy is developing for the fifth consecutive month and at the fastest pace in almost two years. The service side makes about two thirds of the U.K. economy.
S&P Futures: As on Friday, the overnight session proved to be slow for the S&P futures, moving less than 6 points around the 1022 area. The market had some attempts to break higher, but eventually, the move was completely retraced back. In order to move anywhere decisively, the market will need a much stronger volume, which might come during the U.S. open.
S&P Technical View: TheLFB Member Charts
4 Hour chart trend: Short. Main price points: 985-1000. Looking for: Extended wave III
Our bearish wave count on S&P futures is following through very well, and prices seem to already be trading in a corrective wave IV) after the 1011 wave III) low that appeared on Friday. Global equity market trade is lower, and as long it stays this way the dollar should benefit. On the current four hour wave count chart, we are looking for a down-trend continuation with wave V) of an extended red wave III yet to come, which may find the lows somewhere around the 985-1000 area.
Sector Moves: The basic resources sector advanced a little more than 2% in Monday trade, after the price of metals advanced and after RBS upgraded the sector to “buy”. This was best seen in the U.K. FTSE, where mining companies have an important weight in the index.
The chemicals companies were also among the top gainers in most indexes, while the sector advanced 1% in Europe. Together with the basic resources and the chemical sectors, the financial companies had an important contribution to the market. Across Europe, the financials advanced 0.50%. Only three sectors moved lower in Europe, from which healthcare, automobiles & parts and personal & household goods
Economic Moves: During the European session, two different reports have shown that the European and U.K. service sides of the economy expanded in September. This had an important contribution in the market place, lifting a number of companies. Ahead, Monday’s U.S. calendar is relatively light, having only one red-flag report, the ISM Non-Manufacturing PMI.
Crude oil for November delivery was recently trading at $69.55 per barrel, down by $0.40. Crude’s overnight session is very light in most days, and Monday was not an exception. Crude oil barely moved, having a range of only $1.
Crude Oil Technical View: TheLFB Member Charts
Daily chart trend: Short possibilities. Main price points: 74.90. Looking for: Wave A
The chart reveals an unfinished red wave II) of a blue wave A leg. We completely re-worked the count from 33 lows to 74.90 highs, and see that the market made a clear five waves up with the latest top at the 74.90 area, wherethere seems to be a top of wave 1). Elliot wave guidelines state that after every five wave move, the market should make three waves of retracement, which are called a correction. If that is the case, then black wave 2) is now developing with sub-wave A in progress.
Gold for November delivery was recently trading higher by $2.00 to $1006.30. On a light momentum, gold stair stepped higher to test the $1007 area, the same place where the market topped in Friday trade. A break above this level might send gold much higher, probably targeting the $1020 area.