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Global Market Wrap:
European Markets Extend The Uptrend
Equity Futures: Dow +37.00. S&P +4.60. NASDAQ +5.50. Japanese Nikkei -30.00. German Dax +12.00.
European markets are posting small gains, and holding the positive territory that was set by Asian markets overnight. Much of these gains came from the commodity sector for a third consecutive day, as gold heads towards the $1050 area. The S&P futures advanced 5 points overnight and are approaching Tuesday’s high.
European Trade: Most European markets are trading just above the break-even line, but there are some notable exceptions as well. The Luxembourg Luxx index is up 1.40% already, while Holland’s AEX gained 0.80%, at a time when Europe’s blue chip companies barely moved. The gains in the AEX index came only after ING agreed to sell its Swiss Unit to Julius Baer for $500 million.
Ahead, the market expects the earnings results from Alcoa, the first big company to report the numbers for the second quarter. Analysts expect the company to report a loss of 9 cents per share, but these results will be published only after U.S. market’s close. The third quarter is expected to be the ninth in a row in which companies report lower earnings compared to the preceding quarter.
S&P Futures: The S&P futures are up 5 points during the overnight session, trading very close to the high made in Tuesday trade, around the 1055 area. A break above this level might clear the road towards the 1075 area, the place where the market topped two weeks earlier. However, the upcoming earnings season will have an important weight on whether the U.S. market can actually advance.
S&P Technical View: TheLFB Member Charts
4 Hour chart trend: Long. Main price points: 1011.50, and 1075.25. Looking for: Move higher
S&P futures traded into the critical 1041.25 area, discussed yesterday, which means that the previous decline from the 1075.25 top to the 1011.50 low was just a corrective retrace in red wave 4). This latest wave 4) looks to be a part of larger expanding diagonal triangle in the wave 5 or wave C position, (since we are looking for a move into the new highs), with a current blue wave 5) in process.
Each leg of an expanding diagonal triangle is structured by three waves, labeled as wave A, B and C. Ideally traders will need to see three waves up in the last leg of the diagonal, wave 5), where the wave A is already developing with five black sub-waves.
Sector Moves: The mining sector was the best gainer in Europe, as gold is heading towards the $1050 benchmark level, but oil and energy companies lost a few points, reflecting the overnight activity seen in the crude oil market. Moreover, oil & gas, and telecommunications were the only two sectors that declined in European trading.
Surprisingly, the real estate sector was among the best performers in Europe, even though this sector was at the heart of the credit crisis. Since the beginning of the year, the real estate sector shows the weakest return in Europe.
Economic Moves: The economic calendar was clear of the red-flag reports and will remain clear during the upcoming U.S. session, with the exception of the oil inventory report at 10:30 EDT.
Crude oil for November delivery was recently trading at $71.20 per barrel, lower by $0.10. Crude oil saw a very thin overnight session, as it happens more and more often lately. In Tuesday trade, crude oil advanced very strongly during the first part of the day, but shed half of the ground gained during the late U.S. trading hours.
Crude Oil Technical View: TheLFB Member Charts
4 Hour chart trend: Short possibilities. Main price points: 73. Looking for: Wave II) top
On the four hour wave count oil has made another push higher recently into the blue wave v) of a black wave c leg as expected. Wave c is the only leg of the flat pattern that is sub-divided by a five wave structure. As traders can easily count five waves up in c, the flat pattern should be completed soon, which means that a turning point to the down-side may follow over the coming days. However, traders still need to be patient here, as the current blue wave v) may be going up, near to 73 dollars per barrel, before the current black c will be really done.
Gold for November delivery was recently trading higher by $8.40 to $1048.10. Gold continues to advance at a very strong pace, reaching a new all time high during the European trading session. Since the Sunday open, gold has surged nearly $50 dollars.