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Global Market Wrap:
European Shares Up For The Fifth Day
Equity Futures: Dow +75.00. S&P +9.00. NASDAQ +12.50. Japanese Nikkei +40.00. German Dax +12.00.
European Trade: European shares started the Tuesday trading session with very thin momentum, with most indexes posting small gains. The European futures markets pointed to a slightly negative start in European trade, but turned green shortly after the opening bell.
Right now, most European stocks are posting small gains, sending the regional markets higher for a fifth consecutive day. Since the trading session started, Spain’s IBEX added 0.40%, while Italy’s MIB advanced 0.30%. However, some equity markets also declined in Tuesday trade, such as the Swiss stock market, which has lost 0.10% and the Nordic markets, which lost between 0.15-0.30%.
S&P Technical View:
4 Hour chart trend: Mixed. Main price points: 1025, and 1098.50. Looking for: Wave 2) top
S&P futures are higher, but still below the 1098 critical resistance area. Our blue wave 2) top still may be the case so long as the 1098 top holds. Any break of this top will require a re-worked wave count, as wave 2) must not make a retracement of more than 100% of the wave 1) distance.
If new highs hit over the coming sessions then we will look for an impulsive bullish wave count, with new targets around the 1115 area.
Sector Moves: Basic materials and the telecommunication sectors dragged the market lower around the opening bell, the basic material market turned around, as gold bounced from the $1100 support area.
In the telecommunication sector, most of the declines came after Vodafone, the largest mobile company in the world, posted its third quarter results. Even though the report results were in-line with most analysts’ forecasts, Vodafone’s European profits came in very weak, something that triggered a sell-off in the telecommunication sector. Right now, Vodafone is down 2.5%, while France Telecom fell 0.60%.
Negative momentum also came from the travel and leisure companies, but this particular sector is too small to affect the market’s overall momentum. To the upside, bank, insurers and real estate companies advanced on average between 0.3% and 0.5%
Economic Moves: During the European session, the German ZEW Economic Sentiment report came in much weaker than expected for the month of November. The ZEW report hit the wires at 51.1, down from 56.0 in October, on concerns about the country’s consumer market. Until now, this report had little effect in the financial market.
Crude oil was recently trading at $79.05 per barrel, lower by $0.30.
Crude oil Technical View:
4 Hour chart trend: Long. Main price points: 76.47, and 82. Looking for: Triangle
Oil prices have been trapped between the 81.95 highs, and 76.47 support, for the last two weeks, which suggests that the wave IV) structure is a little more complex than first thought. As such, the market may be forming a triangle formation, where the 76.47 support area must hold.
Currently, wave d leg of a triangle structure is probably in process with wave e yet to come, where the prices must not fall below the 76.47 support zone.
A break of the 81.95 highs will put a wave V) target around 84 dollars in play.
Gold was recently trading higher by $1.00 to $1101.40.
Gold Technical View:
4 Hour chart trend: Long. Main price points: 1083, and 1110-1120. Looking for: Wave 5) top
Gold has recently hit the 1110 top, exactly between the Fibonacci resistance levels where the small pull-back appeared. The top of wave V, of a larger wave 5), of an extended black wave III (daily chart), may already be in place. Traders need to be very patient as the market still may trade higher, as long the 1083 support holds. Once the 1083 support is taken out, the near-term short trade should be in play.