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Global Market Wrap:
Investors Buy The Dip, Equities Surge
Equity Futures: Dow +87.00. S&P +10.70. NASDAQ +17.00. Japanese Nikkei +60.00. German Dax +8.00.
European Trade: European markets maintained a very upbeat sentiment that held easily from the opening bell, with six sectors advancing more than 2%. The European cash markets posted strong gains, with most indexes advancing more than 1.5%, in one of the strongest sessions of the last few weeks of trade. At the same time the S&P futures index tested the 1100.00 resistance area, which has been an important swing point in recent trade.
After a mixed Asian session, the European cash market and U.S. futures indexes managed to post, and hold, strong gains that were aided by investors who bought on dips created late last week. The European blue-chip companies, as tracked by the DJ STOXX 50 gained 1.65%, with the Germany’s Dax, France’s CAC 40 and Spain’s IBEX gaining more than 1.50%.
The emerging Eastern European markets lagged behind in Monday trade, with investors cautious due to currency risks and exposure to a region that is absorbing negative growth headlines over the weekend. The DJ STOXX Eastern Europe 300 rose 0.70%, almost half of the performance posted by the Western and Central European stock markets, although still adding to the overall positive sentiment that will undoubtedly assist Wall Street at the open.
S&P Technical View: TheLFB Member Charts
Overall View: Bullish continuation above 1112
4 Hour Chart Flows: Long Price Points: 1082, and 1112 Looking for: A break of 1082 or 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 were lower at the end of the past week, but the market became extremely bullish again after traders were unable to push the prices through the significant 1082 support region.
Traders with a short bias should be very patient here, as another move into the yearly highs may follow over the coming days, if Asian and European equity markets can hold support. In this case major currency pairs will benefit against the U.S. dollar.
Sector Moves: Automobile & parts, banks, basic resources, chemicals, construction materials and the financial sectors advanced more than 2% in Monday morning trade, providing a strong boost to the equity market. Each sector represented in the European equity markets advanced in Monday trade, which is a first for the last few weeks of trading.
Just a handful of stock declined in European trade. In the U.K. FTSE, only three companies traded in the red, while in Spain’s IBEX, only Endesa fell. At the same time, in the German Dax and in the Swiss SMI each of the member companies managed to advance. The basic materials companies lead the gains in each of these indexes.
Economic Moves: During the European session, the PMI report showed that the French, German and euro-area service and manufacturing sides of the economy expanded in November, something that points out that the economy is in recovery mode. These reads will be reflected in the euro area Q4 GDP data.
Crude oil was recently trading at $78.55 per barrel, higher by $1.05
Gold was recently trading up by $19.20 to $1166.00.