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Global Wrap:
Equity Markets Look Fragile- Dollar Strengthens
Equity Futures: Dow -13.00 S&P -2.10 NASDAQ -5.00 Nikkei Closed. German Dax +2.00
Asian trade: This week will likely see lower liquidity and momentum during the Asian session as banks throughout Japan close for a 5-day holiday. Australia’s S&P/ASX has declined 20.70 points since the start of the session finding support in the 4670 area, being among the only markets in the region that was open for trading on Sunday. Usually, the trend of the cash equity markets influences the dollar index, but tonight the Asian markets had little effect, since most Asian markets are closed.
The S&P Futures market is currently trading at 1058, and looking to hold support from the channel set in early September at around 1045. The 4 hour charts are showing momentum reads that are favoring the short side of trade, with a major resistance area now in place at 1070. To move higher, the futures market will need to see a positive open from the German futures market at 02:00 EDT.
The German Dax futures market is trading at 5730, and is at a resistance area formed by the September 2008 drop that moved quickly lower from this same price point, to test 3900 by mid-October 2008. To negate that happening again, the European market needs to initially hold support at 5600.
Sector Moves: With the vast majority of Asian markets closed, the Australian S&P/Asx was the only major market to gauge sentiment from. Most sectors traded mixed, but the materials and ordinaries gold sectors posted relatively strong declines dragging the entire market lower. Interestingly enough, theses two sectors also have the biggest weight in the S&P index.
Economic Moves: The Rightmove house price index was released in the U.K. during the early session. The report showed that home sellers have raised their initial asking prices during the month of September as the property market strives to improve. The supply of homes has decreased in recent months as banks are becoming more willing to lend money. The average cost of a home rose 0.6 percent after declining 2.2 percent during August.
The Australian S&P/Asx declined 20.70 points (-0.44%) to 4,672.50.
Crude oil for October delivery was recently trading at $72.03 per barrel, losing $0.01. A break below this level would have a positive dollar impact, pulling the greenback higher, due to the reverse correlation between the two assets. The $72.00 area had been the support range for crude over the last two days of trading.
Crude oil Technical View: TheLFB Member Charts: Crude oil Example
Daily chart trend: Short possibilities. Main price points: 58.30, 67.00, and 74,90. Looking for: Wave C
Oil prices on the daily chart traded sharply lower at the end of the past week, when prices fell from 73.80 to 68.70. It seems that the wave B pattern is completed at 74.90, after prices traded at a critical area on the four hour chart. We are looking at a new wave count with a possible wave C in progress, where we will be looking for a move towards 58.30, in the wave A) support area, as long the 74.90 holds. Traders, however still need to patiently wait on a break through the lower support line for a down-trend confirmation.
Gold for October delivery was recently trading lower by $2.80 to $1,001.80. Gold saw a bearish gap at the open of the Sunday session, and continued to decline from there on. On the daily chart, gold is consolidating in the 1000 area for a few days now.
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