www.TheLFB-Forex.com The Forex Trader Portal
Global Market Wrap:
Markets Decline During Asian Session
Equity Futures: Dow -14.00. S&P -1.70. NASDAQ -3.25. Japanese Nikkei -10.00. German Dax -47.00
Stock markets were again trading mixed during the Asian session. The Japanese Nikkei was declining at the start of the session by 112 points and the Australian S&P/ASX was gaining 5 points. The export sectors were leading the declines. More stocks on the Nikkei 225 have declined than advanced. Electronics maker Sanyo has dropped nearly 20 percent.
The Bank of Japan has released the meeting minutes from the last monetary policy meeting. Board members have stated that they plan to keep interest rates low even as emergency programs that have been used to help provide corporate funding begin to end. On October 30 the bank decided to close the program of purchasing corporate debt during the month of December.
The trade deficit in Australia has widened less than analysts had forecasted during September. The surge in exports such as coal and gold helped to offset the gains in imports for the country. The increase seen adds fuel to the fact that there is evidence of the global economy recovering from the recession. The stronger demand for natural resources from China has also help exports gain.
S&P Technical View: TheLFB Member Charts
Daily chart trend: Long. Main price points: 1080-1100. Looking for: Wave 5 or C top
The price structure on the daily chart is showing two valid scenarios. On the left side of the chart below, it shows an impulse structure with five waves up from the 665 lows to the current highs. If this is the case, the wave 4 discussed on the weekly chart, below, will be rejected, since the fourth wave is a corrective wave, which means it cannot be sub-divided by a five wave move. However, in this scenario, a three wave push lower into a corrective blue wave 2, with a targets somewhere around 950 area is expected.
On the right side of the chart, we have a different picture, with a wave count that with a zig-zag correction, which is valid for a wave 4 scenario. In this case lower blue wave 5 will follow.
Overall, the current price structure signals for a coming turning point with at least three wave push lower over the coming weeks, since the market is trading around the top of wave 5 or wave C leg.
Overnight, the Japanese Nikkei shed 112.03 points (-1.14%) to 9,732.28. The Australian S&P/Asx was advancing 5.00 points (0.11%) to 4,545.10.
The MSCI Asia Pacific Index has gained 1.07 points or 0.93 percent during the session.
Crude oil was recently trading at $80.15 per barrel, lower by $0.25. Oil has been trading within a 6 point range for several weeks. Support is seen near the 76 area while resistance, which the pair is quickly approaching, is at the 82 level.
Crude oil Technical View: TheLFB Member Charts
Daily chart trend: Long. Main price points: 68.00, and 82. Looking for: Wave V top
Oil has made the latest top around the 82.00 zone, very close to the Fibonacci resistance levels shown between 83 and 84. Volume has not been strong over the last ten days, and the MACD is showing bearish divergence. All these reads are characteristics of a wave V move, which is the final sub-wave of a black wave 1), and is indicative of a reversal set-up, in this case, short.
Gold was recently trading higher by $4.30 to $1,091.60. The precious metal has been on a tear recently. The 1100 area for the commodity is acting as resistance while support for the metal has been seen at 1080.
Gold Technical View: TheLFB Member Charts
Daily chart trend: Long. Main price points: 1026.40, and 1100. Looking for: Wave III top
On the daily gold chart, the market has broken through the 1070 wave 3) top, after hitting the 1026 wave 4) bottom around the bullish trend line. This break has put wave 5) in progress, which has already reached the first target at the 1090 area as discussed last week.
Once wave 5) of an extended black wave III finds the top, traders should look for a pull-back into the black, corrective wave IV.