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Global Market Wrap:
European Markets Surge After Philips’ Results
Equity Futures: Dow +47.00. S&P +5.80. NASDAQ +7.75. Japanese Nikkei +110.00. German Dax +4.00.
European Trade: European markets are trading in the green, reaching a new high for the current year of trading in equities. In addition, the S&P futures have followed the positive momentum seen in the cash markets and have broke above the 1070.00 area.
The European markets surged after Philips, one of the largest electronics companies in the world, beat analysts estimations on better consumer sales. Philips, which is listed in the Hollands’ AEX index surged 6.6%, being Europe’s best gainer. The market expected Philips to post a 45 million euros loss, but the company printed a 174 million euro profit in the third quarter.
The gains are led in Europe by Hollands’ AEX and by Germany’s DAX, both up 1.30%. It happens very rarely for the German Dax to outperform the other major European indexes, because most member companies are seen as blue chips, which tend to move in a more contained fashion. The Eastern European companies are up approximately 1.50%, the most over the last few cash sessions.
S&P Futures: The S&P futures are currently trading just below the 1075.00 area, the same place where the market made a swing point high on September 23 09. A break above this level would send the S&P futures to a new high for the current year.
S&P Technical View: TheLFB Member Charts
4 Hour chart trend: Long. Main price points: 1075.25. Looking for: 5)
S&P futures did not make a larger corrective retrace in wave B in the past few sessions that had been expected technically. Prices are extremely bullish as the 1075.25 highs from September could be thoroughly tested as resistance. In this case, traders may be looking for a final move up of an expanding diagonal triangle with the first target shown around the 1090 area, followed by a second around the 100% Fibonacci projection zone of the wave A distance.
Sector Moves: Even though the rally was triggered by Philips’ results, which is a member of the personal & household goods sector, the best performing sector in Europe is automobiles & parts, which is up 2.2%. Within the sector, the best performing company is France’s Renault, which jumped close to 5% after rumors surfaced about joint projects with Russia’ AvtoVAZ.
Renault’s news created a strong positive momentum in the European carmakers, with Peugeot, BMW and Volkswagen gaining more than 2%. As a note, the automobiles & parts sector was Europe’s best gainer over the last week of trading.
Other important gains came from the telecommunication and from the technology sectors, while the heavy-weights financial and raw material companies only posted modest gains, of 0.80 and 0.55% respectively.
Economic Moves: The report calendar is clear in Monday trade.
Crude oil for November delivery was recently trading at $72.60 per barrel, higher by $0.85. Crude oil is trading at the highest level in three weeks, helped by the gains seen in the equity markets and by the declining dollar index. To the upside, the next major resistance area is in the $73.30 area.
Crude Oil Technical View: TheLFB Member Charts
4 Hour chart trend: Short possibilities. Main price points: 68.00, and 73.00. Looking for: Wave II) top
Oil is still trading higher, step-by-step as it approaches the $73 resistance area. Traders may see an important turning point to the down-side at this resistance test, where the black c) may be completed with an ending diagonal in the sub-wave v). If this is the case, then the whole flat pattern in a red wave II) position will be completed.
Traders know that once the correction is done the powerful moves are just around the corner, which in our case should be to the down-side, into the red wave III).
The break of $68.00 support will confirm the completed impulse move from the $64.97 low, to current wave c) highs.
Gold for November delivery was recently trading up by $4.40 to $1053.00. Gold moved relatively little until now, but it is expected to pick up additional momentum during the late session. Gold’s daily relative strength index is sitting just above the 70% oversold line.