Day Trading Course, Positive Eurozone auctions boost Euro
Day Trading Course, Positive Eurozone auctions boost Euro while FED extends near 0 interest rates to push Gold.
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This week better than expected US equity earnings were offset by poor economic data. Weak GDP in both the US and the UK, showed that final demand from the consumer is still relatively weak. Supported by the ECB’s supply of low cost funds to European banks, positive auction data in peripheral Europe helped European bourses remain on the offensive. And the FOMC surprised investors by keeping rates low and extending the date that they will remain close to zero.
FOMC and Earnings Drive Riskier Asset Sentiment. The dollar is broadly weaker for most of the week with European markets holding on to a better risk backdrop following another encouraging Italian auction, along with hopes for a Greek debt deal. However, Portugal and Spain still remain a concern with Portuguese yields on the rise and Spanish retail sales and unemployment disappointing expectations.
Discussions between Greece and its private sector creditors over a 100 billion Euros debt write-down edged towards an agreement, with bond holders seemingly willing to accept lower yields on their future holdings of Greek debt. The two sides were discussing a deal that would see Greece pay an average coupon below 4% on newly issued Greek debt. A deals would allow the EU to move closer to fiscal unity.
On Friday, the US released 4th quarter GDP which increased by 2.8% annualized. Output was driven by consumption, net external trade and inventories, with consumption boosted by the increase in real incomes as abating prices pressures should marginally boost real incomes. Expectations were for an increase of 3%, which was slightly disappointing.
On the earnings front, the US witness better than expected numbers from a number of large cap companies. Caterpillar, 3M and Apple all showed much better than expected earnings. Aplle beat expectations handily, selling more than 37 million iPhones. Apple also surged with its sales of its iPad, selling 15.43 million units, which was 4 million more than it sold in the previous quarter. Apple sold 5.2 million Mac computers, beating its mark of 4.9 million.
The FOMC took center stage mid-week by keeping rates unchanged and extending the time frame of when rates could change to the end of 2014. This initially helped riskier assets rally, which seemed to be relatively short lived.
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| The Euro Tests Resistance
The EUR/USD was able to break through the 20-day moving average as investors moved into riskier assets. The currency pair tested horizontal trend line resistance near 1.32, twice before profit taking pushed the currency back. Support on the currency major is seen near the 20-day moving average near 1.30, and then again at the 50-day moving average near 1.2850.
Gold closes 4th week of gains Increasing liquidity from the FOMC pushed gold prices above resistance near 1680, on its way to 1730. Momentum in the yellow metal continues to move higher, with the 20-day moving average crossing above the 50-day moving average. Target resistance for gold prices are 1750. Support is seen near 1650.
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S&P 500 Day Trading Course Gap for Oct 28, Support and Resistance
S&P 500 day trading course
With an open of 1066.00 today we started with a gap down at 1064.25. The morning gave us most of the action today with a run down to the low of 1057.00, then back up to the daily high of 1069.50 all by about 11am market time. Afternoon trading gave us a bit of the chop, with 2, 3, and 4 point bars showing volatility while staying within the days 12.5 point range. The close today came in at 1062.25, down 2 points from yesterdays close.
For Wednesday on the upside we are looking at at possible touch to the 1068.50, with a break through that we could see the 1075 area of resistance with an extreme high around the 1088 level. To the down side if we move through the support at 1057.00 we could see a move down to 1050.25, then 1047.50, with an extreme low at 1036.25 in the next week.
Keep your head up and your trigger finger ready! See you at the starting line!
Day Trading Course, Better US Data Along With Bond Auctions Boost Investor Confidence
Riskier assets continued to grind higher
during a week in which US earnings and economic data, along with solid European
auctions created a calm market environment. The US earnings season for
stocks recently began and of the 10 percent of companies that have reported,
more than 70% have exceeded expectations. Implied volatility also declined,
pushing the VIX volatility index below support.
The euro has improved over the past week as bond auction results have
been better than expected and economic data and news developments have been
subdued. However, despite the recent short-covering rally seen over
the past few weeks, the political uncertainty and periphery debt risk should
eventually weigh on the currency. Next week, Portugal, Greece, Spain, Italy,
Germany and France will test the debt markets. While the ECB’s LTRO operations
have helped in part to stabilize funding market stress and immediate market
pressures, helping to mitigate sovereign risks, the recent string of EU auctions
are just the beginning of the funding season. Indeed, the real test for markets
will come in later in the first quarter with Italy and Spain’s bond redemptions
totaling nearly 70 billion Euros.
Next week, the highlight of the US calendar is likely to be the FOMC
meeting on 1/25/2012. The first meeting of 2012 will bring a shuffling
of the voting rights among the FOMC district president. This week’s FOMC meeting
is likely to bring forward a new communication strategy by the Federal Reserve.
In particular, policy makers are likely to make public member’s projections of
the appropriate policy rate in the years ahead to increase the Fed’s
transparency.
In the US, the economic highlight was the better than expected
jobless claims report. Initial jobless claims fell by 50,000 to
352,000 in the week ended Jan. 14, according to the Labor Department. The
decline was the largest in a single week since Sept. 24, 2005. Jobless claims
have now returned to levels seen before the US financial crisis. Economists had
forecast claims would fall by 19,000 to 380,000.
Initial jobless claims fell by 50,000 to 352,000 in the week ended
Jan. 14, according to the Labor Department. The decline was the largest
in a single week since Sept. 24, 2005. Jobless claims have now returned to
levels seen before the US financial crisis. Economists had forecast claims
would fall by 19,000 to 380,000.
Euro
short squeezes up
Technically, the Euro was able to rebound off of the recent lows near 1.26
and create a short squeeze up to 1.29. Last week commitment of traders report,
showed a record short position in Euro futures which is bound to cause
additional short covering. A break above horizontal trend line resistance near
1.3070 will likely lead to a quick test of the 1.32 range.
S&P likely to test 1325
The S&P 500 broke above resistance
levels near 1306, and is likely to continue to grind higher to test the 1325
resistance point. Momentum indicators such as the MACD are pointing to higher
levels as the index moved above 1, for the first time in 6 months.
Additionally, the cross of the 50-day moving average of the 200-day moving
average should add upside momentum.
