Europe Rallies On The Heels Of U.S. Markets, Nikkei Stumbles

The Japanese Nikkei fell as much as 2.7 percent at one point today in volatile trading as investors sold off long positions before the weekend. The sold of positions in futures, and the cash market before the weekend’s elections in the upper house.

Europe rallied higher following record setting highs for the DJIA and S&P 500. Investors were extremely happy with dovish remarks made my Federal Reserve Chair Benjamin Bernanke as he rapped up his testimony before Congress.

STOCKS
Asian markets could not follow the strong days had by U.S. and European markets the night before. The Nikkei saw a huge turnaround as it fell from its 8 week high hit earlier in the day. The market plummeted 2.7 percent at one point but closed the day losing just 160 points or 1 percent lower. The S&P/ASX in Australia continues to fall from the 5,000 mark. The Kospi in South Korea lost 0.5 percent and the Shanghai was up 0.1 percent for the day.

In Europe on Thursday, the FTSE closed up to 1,208.25 points, a 0.8 percent gain. The CAC was up 1.3 percent and the IBEX in Spain was up 2 percent. Italy’s benchmark, the MIB was up 2.3 percent.

In the United States, the DIA was up over 78 points to close at 15,548.54. This is a new all-time high beating the one set on May 22. The S&P 500 also set a new record closing at 1,689.37 and the NASDAQ rose 1.28 points to close at 3,611.28.

CURRENCIES
The EUR/USD is currently making some new higher lows, however we remain bullish on the market. The pair is currently at 1.3135 and has strong resistance at 1.3200. The USD/JPY flirted with 100.86 today and is trading now at 100.03. We see strong support at 99.60 as the pair retreats from the resistance at 100.70. Please see the chart below.

The AUD/USD has good support at 0.9150. We are seeing profit take after it hit 0.9300 yesterday and the market is trading at 0.9180 now. We remain bullish as long as the support holds and could test 0.9250.

COMMODITIES
Copper (3.148) is moving towards 3.17 for a close this week. With charts showing an uptrend we might just break through 3.20 in the next few trading sessions. Gold is trading around the 1290 area looking bearish. However, Silver is ticking up higher. We could test 19.65 or 19.75 before the weekend. Strong resistance is at 20.00. That is a key barrier and will be hard to penetrate higher.

TODAY’S OUTLOOK
Friday, is a quiet day for economic news. The G20 is in Russia. Greece has gotten enough votes in their parliament to pass a sector reform bill. This will allow for more job cuts for the painful austerity measures allowing them to get their next tranche of the bailout.