Global Market Wrap: Markets Waiting For Investors To Appear

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Global Market Wrap:

Markets Waiting For Investors To Appear

Equity Futures: Dow +12.00. S&P +1.60. NASDAQ +2.25. Japanese Nikkei -20.00. German DAX +4.00.

European Trade: The global equity markets continue to trade on very thin momentum, following the same pattern seen in recent trade, of being unable to attract sellers while holding at yearly highs. Until now, the cash and futures indexes have barely moved, as investors do not show any interest in moving the current market valuations.

Trading volumes have remained subdued, and affected the Asian markets, which closed the cash session near to the breakeven line, while European indexes advanced approximately 0.20% during the first part of the day.

Most of the trading has concentrated around the basic materials companies, while banks were responsible in some part for the selling. Since the beginning of 2009, the basic materials sector has been the best gainer in the global markets. Right now, mainly two forces are pulling this sector higher; investors thinking that China is likely to continue to show strong demand for commodities, and because of the trend known as “window dressing” – institutional investors buying shares that outperformed the market over the last few months to air out their balance sheets. A similar trend may be seen in the upcoming U.S. session, with raw materials companies helping the market stay in the green.

In the commodity market, trading has also been subdue, but it is important to note that the market is still holding higher despite the strength that the dollar has shown lately. For now, commodities appear happy to push through the last two trading sessions of 2009 holding near-term highs.

Crude oil was recently trading at $78.95 per barrel, higher by $0.20

Crude oil Technical View: TheLFB Member Charts
4 Hour Chart Flows: Mixed Price Points: 81.95 Looking for: Top of Long wave B

Momentum: There is still a very flat momentum read to crude oil trade that has been in place since the 6th Nov. The 72.50 area continues to be a main price point, after sellers were held at bay recently around 69.50. The 80.50 area is the topside number to breach.

Elliott Wave: Oil hit the 79.00 critical resistance zone over the past few sessions, and our wave count was re-worked.  We have an expanding diagonal trend line shown in a Short, blue wave A. Wave A found the lows at 68.50, where market reversed into a Long, corrective wave B that is searching for a top.

Wave B is a corrective pattern, where a zig-zag structure, with red A)-B)-C) labels, is shown. The current prices of the zig-zag pattern are trading close to the 76.4% Fibonacci retracement zone (78.70), where a top may get hit for a bounce into a Short wave C.

The bearish wave count remains valid so long as the market trades below the 81.95 resistance region.

Gold was recently trading lower by $3.30 to $1104.60.

Gold Technical View: TheLFB Member Charts
4 Hour Chart Flows: Short Price Points: 1074, and 1119 Looking for: A Long wave A

Momentum: Gold signaled Long on the 3rd of Nov and has just started to reverse that mode with recent profit taking. 1075 is near-term support, backing any further long tests of 1120.

Elliott Wave: Gold has set recent lows around the 1074 zone where our ending diagonal pattern (reversal) completed. An ending diagonal pattern is placed in our blue wave V position, which is a sub-wave of a larger Short, red wave A) and indicates a near-term turning point is in process.

If our wave count is correct, traders may start look for a larger red wave B) break higher towards the 1150 area, with a three wave move, labeled as blue waves A-B-C. The break of 1119 resistance (wave IV) top) will confirm a move into a Long wave B).