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Global Market Outlook:
Asian Stock Hold In The Red
Equity Futures: Dow +18.00. S&P +2.80. NASDAQ +4.00. Japanese Nikkei -12.00. German Dax -2.00
Asian trade: Most Asian stocks are trading below the breakeven line, reflecting the selling seen during the U.S. session on Friday. The only notable exception is the Karachi SE 100 Index, which is up 1.1%. The Japanese Nikkei opened mixed, and then started to move lower to reach the weakest value in twelve weeks. Hong Kong’s Hang Seng index lost approximately 0.20%, while the China Enterprises Index, which gauges the performances of Chinese shares listed in the Hang Seng market gained 0.15%. The Shanghai stock market was closed in observance of National Day Celebrations.
S&P futures barely moved during the Asian session. For now, the futures index is trading at the 1020 area, near to Friday’s closing price.
S&P Futures Technical View: TheLFB Member Charts
Weekly chart trend: Mixed. Main price points: 665.50, and 1252.50. Looking for: 50% Fibonacci level.
S&P futures are still bullish on the weekly chart, after a powerful bounce off the 665.50 support area that was established at the start of this year. This recent uptrend could be a pull-back in wave 4 of a bearish impulse count, with wave 5 yet to come. In this case, wave 4 must not overlap the territory of wave 1, shown below (1252).
The converse technical view is that it may also be a start of a new long-term uptrend, if we consider a possible three wave structure from the 1586 top to the 665.50 lows.
Sector Moves: Banks were trading broadly higher in Asia, but the gains were small. In the Nikkei, with the financials advance led by Nomura Holding, which is up 6.5%, being the second best gainer in the index. However, in the Hang Seng index, banks are moving lower after HSBC Chief Executive said that he is cautious about growing too fast.
Other than the banking sector, technology companies declined in Monday trade as some investors consider that the global recovery will be much slower than the market had already priced in.
Economic Moves: A report from Australia has shown that the number of advertisements featuring jobs increased in September. The report showed that job advertisements increased by 4.4%, for a second monthly gain. Also, the country’s services sector has slowed the pace of contraction during September. The index gained 1.3 points during the month to a 49.3 reading. The critical 50 level is what separates contraction from expansion. This adds fuel to the fire that the central bank, which meets tomorrow, may decide to hike interest rates to 3.25 percent from the current 3.00 percent.
Crude oil for October delivery was recently trading at $69.90 per barrel, lower by $0.10. The market is trading below the $70 benchmark level, the same place that acted as an important intra-day swing point in Friday trade.
Crude oil Technical View: TheLFB Member Charts
Weekly chart trend: Mixed. Main price points: 33, and 74.90. Looking for: Wave 2).
On a weekly Oil chart we are still looking for a corrective pull-back down to Fibonacci support levels, where wave 2) may find the bottom. Wave 2) is a corrective wave, which means we can expect very slow and choppy price action on the down-side over the coming weeks, where falling prices must not break through the 33 low, while the market trades below 74.90 high.
Gold for October delivery was recently trading higher by $0.90 to $1005.00. Gold posted some small gains during the Asian session, but still the market’s momentum is very low. On the daily chart, gold is trading just below the 20-day moving average.