Global Market Wrap: Equities and Commodities Lower

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Global Market Wrap:

Equities and Commodities Lower

Equity Futures: Dow -30.00. S&P -3.80. NASDAQ -5.50. Japanese Nikkei -40.00. German Dax -8.00.

European Trade: European markets opened the day barely above the break-even line, but started heading lower in quick fashion, with financial shares acting as a major drag on most indexes. 

The declines in Europe were led by Austria’s ATX, which is down 1.50%, closely followed by the Nordic equity markets, which fell as some market participants say that Latvia is preparing to devalue its currency, something that would put undue pressure on the Nordic financial system. The Eastern European markets are trading broadly lower, with most stock from the region down 0.70%. At the same time, the U.K. FTSE shed 0.10%, while the German Dax lost 0.25%.

The S&P futures are currently trading in the 1085.00 area, near a resistance trend-line that has been holding the futures index for almost a weak. A break below it will probably trigger a near term sell-off, which will drive the market down to the 1075 support area.

S&P Technical View: TheLFB Member Charts 
4 Hour chart trend: Long. Main price points: 1075.75, and 1115-1120. Looking for: Wave 5) top
 
S&P futures made new highs in trade this week, and as such, the wave count has been re-worked and a new target at the 1115-1120 area is being monitored. An expanding diagonal pattern in black wave 5 or C is not completed yet, as the market seems to be forming a complex (W)-(X)-(Y) structure with the current wave B of wave (Y) in process. The wave count remains valid so long as the current wave B trades above the 1075.75 wave (X) bottom. Any break of this bottom will signal for a move lower over the coming sessions.

Sector Moves: Financial shares added a strong downbeat sentiment to the European market, even though Deutsche Bank, one of Europe’s largest banks, beat analysts’ earnings estimates by a large margin. The market ignored this and focused on the comments made by Mr. King, the head of the Bank of England, who said in notes from the MPC minutes that banks too important to fail should be split, so further bailout could be avoided in the future. 

Together with the financials, the automobiles & parts sector also had a crucial downward contribution to the market, plunging 1.80%, after the French group Citroen Peugeot reported a drop in the third quarter profit. Peugeot dropped an impressive 7% in Wednesday trade, the most among the European blue chip companies, while Renault fell 3%. Daimler, which has the biggest weight in the automobiles & parts sector fell 1.50%. 

Economic Moves: 
10:30 EDT Crude Oil Inventories Exp 0.9M Prev 0.4M
14:00 EDT Federal Reserve Beige Book

Crude oil for November delivery was recently trading at $78.30 per barrel, lower by $0.70. Crude oil is declining for a second consecutive day, after an uptrend that lasted 8 days. The current declined come as some market participant say that, the market’s rally was too sharp. 

Crude oil Technical View: TheLFB Member Charts

4 Hour chart trend: Long. Main price points: 71.92, 74.90, and 80.30. Looking for: Wave IV)

Oil traded lower from 80.30 over the past few sessions as expected. It seems that wave IV) is now in progress, which may easily fall down to the 74.90 support zone, before another bounce higher, with red wave V) move. The wave count stays valid so long as the market trades above the 71.92 wave I) top.

Gold for November delivery was recently trading higher by $0.10 to $1058.70. Gold is trading once again below the $1060 area, after the rally seen over the last few trading sessions was completely retraced.