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Global Market Wrap:
Technology Sector Declining During Asian Trade
Equity Futures: Dow +15.00. S&P +1.60. NASDAQ +1.50. Japanese Nikkei -70.00. German Dax -5.00
Asian markets were declining early in the session even after automobile maker Honda boosted their profit forecast. The Japanese Nikkei was losing 44 points while the Australian S&P/ASX dropped 22 points. Most sectors were trading mixed with the technology sector fueling the declines. Shares in technology related fields were declining with Kyocera Corp shedding 0.87 percent and Toshiba dropped 3.49 percent.
The retail sales report was released from Japan today. Most analysts were expecting a 1.5 percent decline and were not far off from the actual 1.4 percent decline. This is the thirteenth month in a row that Japan’s retail sales have fallen. This shows that consumers cannot be depended on to lead the recovery and raise the country out of the recession.
The quarterly consumer price index was released by the Australian Bureau of Statistics today. This report has shown that the index has risen to 1.0 percent after economist surveyed were expecting a 0.9 percent increased after a 0.5 percent jump seen in July’s reading. Helping the index rise was the fact that fuel and electricity costs increased. This also increases speculation that the Reserve Bank may again raise rates at the next meeting.
Trade Plan of the Day: TheLFB Trade Plan is USD/CAD, one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, S&P futures, oil, gold, and the dollar index.
The MSCI Asia Pacific Index has lost 1.92 points or 1.60 percent during the session.
Overnight, the Japanese Nikkei dropped 44.83 points (-0.44%) to 10,167.63. The Australian S&P/Asx was declining 22.00 points (-0.46%) to 4,731.00.
Crude oil was recently trading at $79.55 per barrel, with no immediate change in price. Support for the commodity was seen near the 77.76 while resistance is seen at 79.85 and also at 81.90.
Gold was recently trading higher by $4.20 to $1,039.60. The precious metal spent the entire previous session trading below the neutral swing point with resistance at the 1043 level while 1032 so acting as support.
TheLFB Charting: Gold Elliott Wave view
4 Hour chart trend: Long. Main price points: 1043, and 1070. Looking for: Wave 4)
Gold has finally broken through the 1043 support zone of wave A, we disscussed here recently. This break-out put the current wave C in play, where traders may see another 25-30 dollar drop over the coming days, to hit the 38.2% Fibonacci retracement zone, of a red wave 3) distance. In this area is also shown a trend-line connected from August to this month lows, which may be a good support area for another bounce higher.TheLFB Charting: S&P Futures Elliott Wave view
4 Hour chart trend: Long. Main price points: 1062.50, and 1098. Looking for: Wave 5) top
S&P futures fell powerfully on Monday, exactly into the 1062.50 support region we discussed here last week. This area needs to be taken out for a down-trend continuation with our primary wave count, which will suggest that the top is in. Traders however, should also be watching the alternative wave count where a move higher in wave Y may be the case if the current support around 1062 with wave X holds. This is a swing point of great importanve, and may be guided by earnings momentum to move long, or worries in the financial sector to move short.
TheLFB Charting: EUR/USD Elliott Wave view
4 Hour chart trend: Long. Main price points: 1.4816, and 1.5062. Looking for: Break through 1.4816
EUR/USD exploded lower in the previous session, driven by lower by falling stocks and gold prices. The lower support line of an ending diagonal was broken at that time, just before prices declined for more than 160 pips.
This could be the start of a new trend now that the wave five top is in place at 1.5062 area.
Patient traders will wait on a break of the 1.4816 support zone, which will be the reason for a five wave structure in current red wave I, that will suggest that the top is in, and that technically the euro will find sellers more easily than buyers.