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Global Market Wrap:
Amber Light For Stocks, Green Light For Dollar Bears
Equity Futures: Dow +40.00. S&P +5.80. NASDAQ +5.75. Japan Nikkei -20.00. German Dax +6.00
U.S. Trade: The U.S. cash equity market traded on very light momentum in Wednesday trade, ahead of the Thanksgiving Holiday. The same pattern was observed in the pre-market futures action, and during the overnight session. It is likely to continue over the upcoming Asian and European trading session as well.
Only 500 million shares changed hand on the NYSE, far below the average of the last few weeks of trading. This stopped the market from moving too far in either direction, with the U.S. major indexes holding around 0.5% gains all day. The range bound trading, coupled with declining volumes sent the VIX index down to the lowest level in 15-month. The VIX indicator tracks the implied volatility of the S&P 500 index options, and is many market participants favored indicator of risk-aversion.
S&P Technical View: TheLFB Member Charts
4 Hour Chart Flows: Long Price Points: 1082, and 1112 Looking for: A break of 1112 to signal mid-term sentiment
Momentum: S&P futures went into long mode in the near-term on Nov 13th and have easily held that trend, and that has allowed the tests of 4 hour chart support to be bought. There is a tight sideways channel forming and that is allowing the move from overbought to oversold and back again, to be completed over a 5 day period. It seems to be a meander higher at the moment.
Elliott Wave: S&P futures traded significantly higher over the past two days, towards the 1112 resistance area. Equity futures look bullish right now, and are expected to make at least another push into the highs over the mid-term, after the 1082 support area held well.
The wave count of a black wave IV) has been re-worked into the structure shown on the 4 hour chart, highlighting the recent bottom around the 1082 zone, followed by a Long wave V) that is in progress. Any break of the 1112 top will put a 1120 target in play, which should drive the majors higher against the U.S. currency.
Sector Moves: Except for the basic materials companies, most sectors represented in the U.S. market traded flat in Wednesday trade. The gains in the basic materials sector were led by miners and by energy companies, as the commodity market saw a very busy trading session. Within this sector, the gains were led by Vale, which advanced 3.00%, Chesapeake Energy Corporation, which surged 5.20% and by BHP Billiton plc, which gained 3.90%.
In the Dow Jones Index, Du Pont advanced 1.55% and Caterpillar gained 1.83%. Both companies are members of the industrial goods sector, which gained 0.6% in Wednesday trade.
Economic Moves: The U.S. session was loaded with macroeconomic news reports, but they had little influence in the financial market. At 08:30 EST, the market absorbed the Durable Goods Orders reads, which declined in the month of October. However, the negative Durable Goods Orders report was offset by the data coming from the U.S. labor and housing markets. The Unemployment Claims fell to one-year low during the prior week, while house prices rose to almost a one year high. Another report showed that Consumer Spending picked up in the month of October, being the fifth month in which spending advanced out of the last half of year.
Crude oil was recently trading at $77.95 per barrel, higher by $1.95.
Gold was recently trading higher by $22.90 to $1190.30.
Treasuries advanced again in Wednesday trade as investor consider that the Fed is willing to keep interest rates at low levels for an extended period. Interestingly, the treasury and the equity market have had positive correlation lately, something that does not happen very often and will start to soon raise red flags in regard to equity and Treasury valuations.