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Global Market Wrap:
Slow Day For Global Markets
Equity Futures: Dow -21.00. S&P -0.70. NASDAQ -6.25. Japan Nikkei -30.00. German Dax +8.00
The U.S. market saw very thin momentum in Tuesday trade, as mixed data hit investors. The S&P index opened up surrounded by positive momentum following the better than expected Case-Schiller housing numbers, but a wide sell-off came shortly after the Conference Board Consumer Confidence index fell unexpectedly in September.
U.S. Trade: The S&P futures had a range of only 12 points during the day, or a little more than 1%, one of the thinnest sessions of the last few weeks of trading. In addition, this happened even if the market expected two top tier reports, the Case-Schiller and the CB Consumer Confidence.
The S&P 500 index opened the cash session very strongly, and helped by the better than expected Case-Schiller numbers, it breached for a few short moments the 1060 resistance area. From there, the index fell 9 points, covering almost today’s entire range after the Consumer Confidence numbers missed the expected numbers by a large margin.
Many investors lay their hopes that consumers will drive the economy through the recovery phase, so the weaker than expected numbers were a hard hit for the market. For now, the U.S. markets are trading slightly below the breakeven line, looking somehow bearish in their inability to move higher.
S&P 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: Most sectors traded mixed in Tuesday trade, with the industrial production sector being the top gainer, advancing 0.7%. Except for the technology sector, which lost 0.5%, the others traded mixed, moving up and down around the break-even line. The best performing industry in the U.S. market was the newspapers industry, with Gannett Co surging 20% after it announced better than expected earnings forecasts. Ganner Co is also the best gainer in the S&P 500 index.
Economic Moves: The market expected the Case-Schiller and Conference Board Consumer Confidence reports, both having a crucial influence in the market, and investors were able to weigh better housing numbers with less than expected consumer confidence. Ahead, traders are preparing for a busy overnight session, with top tier reports coming both in the Asian and in the European sessions, with U.S. employment data also on the horizon.
Crude oil for October delivery was recently trading at $66.50 per barrel, down by $0.30. Crude oil traded within the range developed in Monday trade, unable to move anywhere decisively as the trading session was very light both in the equity and in the currency market.
Crude Oil Technical View: TheLFB Member Charts
Daily chart trend: Short. Main price points: 60.00-61.00, and 73,00. Looking for: Wave III)
Oil prices on the daily chart have broken through the lower trend-line support which signals for a lower wave III) move. Prices have also traded through the 67.00 wave I) low, which is confirming that the red wave II) is behind and that new leg is in progress. As such, we will be looking for a move towards the 60.00-61.00 Fibonacci support level, where wave III) may hit the bottom. The wave count stays valid so long as the 73.00 highs of wave II) holds.
Gold for October delivery was recently trading higher by $0.10 to $994.20. Gold is posting some very small gains, after it failed to pull any important moves during the session. Despite this, gold tested the $985.00 area, the support area of the last few weeks of trading.
Gold Technical View: TheLFB Member Charts
4 Hour chart trend: Mixed. Main price points: 971.46, and 1023. Looking for: Wave 4)
On the four hour gold chart, we are still looking for a red wave 4) complex correction, which has already traded down to 985-990 support, into the same area of the previous fourth waves, where a bounce higher may happen over the coming days. In the current wave count, gold prices should not trade below the 971.46 area, as the fourth wave of an impulse count must not overlap the territory of wave 1), otherwise the wave count will be invalidated.
Any break through wave X highs over the coming days, will signal that wave 5) is in progress with a possible move to the 1035-40 target area.
Treasury notes moved very little on Tuesday, even though the consumer confidence numbers failed to reach market’s expectations. The yield on the 10-year Treasury notes gained 1.1 basis points, up to 3.29%.