Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Stock Market Indices End Up After A Choppy Days Trading

Stock-Markets / Financial Markets 2009 Jul 09, 2009 - 04:00 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleIt was one of those all sound and no picture days where stocks ended marginally positive for the day after a rally(ette) in the last half an hour. After the bell Alcoa marked the start of the pantomime that is the quarterly earnings season by reporting a smaller than expected loss i.e. the less bad is good club. Stepping away from the intra day noise and seeing the bigger picture the S&P 500 has lost over 5% over the past few sessions and is 75 points below its June 11th high.


The key question to ask is whether we have reached an inflection point in the index and downside momentum is building. A sustained selloff in the index would confirm the much-anticipated correction in growth expectations and may led to a summer of higher volatility and risk aversion, which I have been highlighting in recent weeks here. Both fundamental and technical factors are now in play and there are plenty of potential sources for volatilities in the coming weeks, any of which may trigger a broad selloff.

Technically speaking the S&P 500 confirmed with Tuesday’s close a head and shoulders reversal. The move lower Tuesday together with the bearish close, confirms the head and shoulders reversal pattern that now puts stocks in a downward cycle. Whether this is a correction or a resumption of the primary bear trend remains to be seen. What is clear though is that the near term should see stocks move lower with the first target in the S&P at 845.70 which is the level around the 38.2% retracement of this years strong bounce between March and June.

There are two levels to watch for as far as resistance is concerned: 1) 898.70 and 2) 931.90. The latter is key and a break here is required to ease the developing bearish theme.

Other factors worth noting:

  1. The S&P500 closed below the 200-day Moving Average (MA).
  2. The Nasdaq closed below the 50-day MA for the first time since March 16th.
  3. Oil Futures closed below the 50-day MA.
  4. The VIX closed above the 50-day MA.

Today’s Market Moving Stories

  • Japanese stocks fell on Thursday after the yen spiked to a five-month high against the dollar overnight, with investors seeking to trim riskier bets amid growing concerns about the health of the global economy. Japan’s Nikkei average fell 0.5 percent, touching a near two-month low and down for a seventh straight day. MSCI’s measure of stocks elsewhere in the Asia-Pacific as barely moved, clinging to gains of more than 27 percent so far this year.
  • Almost one in three new Chinese college graduates are unable to find a job, according to the official Xinhua news agency. Citing the Ministry of Education, Xinhua said about two million graduates, or 32 percent of the total of 6.11 million, were without work. The figure is the highest since the ministry started collecting the data in 1996.
  • European metals stocks (e.g. Vedanta, Norsk Hydro & BHP Billiton) are bid this morning on the back of Alcoa’s numbers last night. Rio Tinto have been upgraded by rating agency S&P following its successful $15.2bn rights issue & progress with its disposal programme
  • Auto makers Daimler & Peugeot Citron are looking perky today after an “overweight” recommendation from Bank of America (note Chinese car sales “figures” showed a 48% increased in June according to official figures
    Tullow Oil has been cut to neutral at Credit Suisse
  • Even though I’d hinted in these columns that I was favourably inclined towards C&C their trading statement still came as a positive surprise. The core cider unit is enjoying strong momentum thanks to weather, new product and better marketing. In Ireland, cider volumes during the first four months are up an impressive 4% amid the toughest consumer recession in Europe ever. They could soon be one some ones radar as a takeover candidate by a global player. That said I can’t see the Wurzels making a comeback
  • Fyffes are benefiting from strong demand for bananas from Japan where imports of the yellow fruit bellowed of Andy Warhol are up a staggering 30%. They will also of course get a lift from the strong yen when reporting revenues in Euro. This demand may help why prices have jumped in Europe in the midst of a global depression.
  • Going out in style – Stockbroker wore a designer suit, ordered a glass of champagne – and jumped.

IMF Sees End To Recession – But Not In Euro Area
The IMF came out with revised forecasts yesterday, according to which global economic growth for 2009 was revised downward – from minus 1.3% to minus 1.4% – and revised upwards for 2010, from 1.9% to 2.5%. The optimism for 2010 reflects stronger growth in emerging markets, the US, China and Japan. For the US, the 2010 forecasts are up from 0 to 0.8%, for Japan from 0.5% to 1.7%, but for the euro area only from minus 0.4% to minus 0.3%. Unemployment will rise throughout 2010 on a global level, as the growth is insufficient to stabilise employment. FT Deutschland quotes Olivier Blanchard as warning that governments and central banks not to embark on premature exit strategies. While the risk of a global financial meltdown is now lower, the banking sector remained at risk. The IMF said the stabilisation occurred only as a result of direct government intervention. Blanchard also said the big challenge for the post-2010 era is to find a replacement of the US consumer as a source for global demand growth.

Chinese Whispers
Reuters reports that China will expand about 8% this year, a leading think-tank said on Thursday, the latest in a series of broadly bullish reports reflecting the growing momentum of the world’s third-largest economy. The State Information Centre, which reports to the National Development and Reform Commission, China’s top economic planning agency, said it was premature to declare victory after a deep downturn triggered by a collapse in global demand. “The Chinese economy has successfully touched bottom and has started to rebound, but this does not mean a recovery trend is assured,” the research outfit said in a report carried in the official China Securities Journal. But the centre pointedly said the economy did not need further stimulus on top of the government’s 4trl yuan ($585bn) spending plan or the help of lower borrowing costs. “In a view of preventing inflation in the long-term and controlling inflationary risks, there should be no interest rate cuts this year,” the SIC said. The International Monetary Fund on Wednesday became the latest organisation to take a rosier view of China’s prospects, raising its forecasts for GDP growth this year and next by 1% to 7.5% and 8.5%, respectively.

The World Bank, the Organisation for Economic Co-operation and Development and a clutch of banks have recently upgraded their forecasts as evidence mounts that massive fiscal and monetary stimulus is likely to lead to full-year growth close to the government’s 8% target. Indeed, the official Xinhua news agency cited unidentified statistics officials as saying gross domestic product growth was already “close to 8%” in the second quarter. The figures are due on July 16. A Reuters poll points to growth of 7.5% from a year earlier. Xinhua said the data would clearly show that the economy was no longer declining but was now moving up. Many export-reliant economies in Asia are banking on a rebound in China to help offset still feeble consumer demand in major, recession-hit Western mark.

There are now a whopping 29 million “underutilised”workers in the U.S.

Commodities Commotion
For Commodities here should be a summer correction for commodities as the seasonal manufacturing slowdown takes effect. Copper is particularly vulnerable because normally LME copper inventories rise in August, weighing on the price. Chinese stockpile buying has led to record imports of a number of commodities, including copper, and has driven price gains. That said, large surplus stocks of copper may have built up and imports should ease in July-August. Cancelled warrants, which are an indication that metal is likely to be removed from warehouses, have tumbled from 21% of total LME inventory in May to around 5%. However, in the longer term copper remains our top base metal pick. Inventories are approaching critical levels; mine capacity utilisation remains woeful and the supply response is likely to be weak when demand recovers

Data Ahead Today

  • The chaps at the Bank of England MPC makes their policy decision today at noon (London time). No change in rates (from 0.5%) is likely, but a bigger question is what the MPC announces on QE. They have 3 main options: i) do nothing, in which case QE ends in two weeks’ time, ii) announce the final £25bn (of £150bn currently permitted) will be used (I think this is the most likely outcome) or iii) announce the £25b and ask the govt for permission to do more. The MPC could at the same time as doing any of those options slow the pace of QE from its current £6.5bn per week, signalling that the policy is slowly being wound down. At current rates of purchases the extra £25bn would span the August Inflation Report meeting, at which point their new forecasts may dictate whether more QE needs to be done
  • Notable earnings reports today include 3com (expected EPS $0.05) and Chevron ($1.27)

And Finally….
I wonder what kinda ditty a group of Ryanair passengers would compose, especially if they had to stand.

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2009 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules