A look at regional & global technical trends
US: Resuming the downtrend.
US markets ended the week dramatically with the S&P 500 (SPX – 1,360) staging a steep jobs and oil-related sell off, breaking below our cited 1,369 support level. NYSE volumes were the highest since late March (of which 92% was “down” volume) reinforcing the bearish nature of the move. Our long-standing target remains the 1,198- 1,220 range marking a 38% retracement of the 02-07 rally and the June 2006 lows.
Crude oil: Surprise! New highs.
Crude oil’s (CL1 - $138) sharp recovery off $120 support to new highs over the past couple of sessions puts our view that we were at or close to a top around $135-138 under some pressure. A close above $143, while not our preferred view, would bring the next major pivot point at $185 into focus. We note that oil stocks actually fell in Friday’s US session.
Intermarket confirmation.
Crude and forex are inextricably linked at present with crude’s surge being matched move for move by the Dollar Index (DXY – 72.4) and within that, the Euro (EUR – 1.574). The DXY’s price action since the 22 May lows at 71.8 still supports further upside to recover back to at least 75, the 27 Feb breakdown level. We note that the yen (JPY 105.4 ) has failed to break the downtrend at 106.5
Japan: Reiterating - Buy the dip.
We are now looking for the index to retrace at a minimum to test the 12 May lows at 1,327, with 38% retracement at 1,323. The impulsive move from March still suggests that this will be a pullback in which to buy and this will be reinforced by the index continuing its out performance relative to the US.
Asia: MSCI Asia ex Japan rolling over.
Friday’s sharp selloff in western markets increases the odds that the MSCI Asia ex Japan’s (MXASJ - 543) rally from the March low has peaked. We are looking for a decline towards the 500-517 range before recovering again. We highlight the key levels to monitor in Asian markets and feature the following countries China, Korea, Taiwan, Hong Kong and India. Notably, India looks set for new lows with Taiwan and Hong Kong targeting a re-test of long-term trend support.
US: Resuming the downtrend.
US markets ended the week dramatically with the S&P 500 (SPX – 1,360) staging a steep jobs and oil-related sell off, breaking below our cited 1,369 support level. NYSE volumes were the highest since late March (of which 92% was “down” volume) reinforcing the bearish nature of the move. Our long-standing target remains the 1,198- 1,220 range marking a 38% retracement of the 02-07 rally and the June 2006 lows.
Crude oil: Surprise! New highs.
Crude oil’s (CL1 - $138) sharp recovery off $120 support to new highs over the past couple of sessions puts our view that we were at or close to a top around $135-138 under some pressure. A close above $143, while not our preferred view, would bring the next major pivot point at $185 into focus. We note that oil stocks actually fell in Friday’s US session.
Intermarket confirmation.
Crude and forex are inextricably linked at present with crude’s surge being matched move for move by the Dollar Index (DXY – 72.4) and within that, the Euro (EUR – 1.574). The DXY’s price action since the 22 May lows at 71.8 still supports further upside to recover back to at least 75, the 27 Feb breakdown level. We note that the yen (JPY 105.4 ) has failed to break the downtrend at 106.5
Japan: Reiterating - Buy the dip.
We are now looking for the index to retrace at a minimum to test the 12 May lows at 1,327, with 38% retracement at 1,323. The impulsive move from March still suggests that this will be a pullback in which to buy and this will be reinforced by the index continuing its out performance relative to the US.
Asia: MSCI Asia ex Japan rolling over.
Friday’s sharp selloff in western markets increases the odds that the MSCI Asia ex Japan’s (MXASJ - 543) rally from the March low has peaked. We are looking for a decline towards the 500-517 range before recovering again. We highlight the key levels to monitor in Asian markets and feature the following countries China, Korea, Taiwan, Hong Kong and India. Notably, India looks set for new lows with Taiwan and Hong Kong targeting a re-test of long-term trend support.
Wait and Watch.......
Keep Reading.........................................
L&T Construction has won orders worth Rs 1,060 crore.
ReplyDeleteCapitalstars
Hey, thanks for the information. your posts are informative and useful.
ReplyDeleteBandhan Bank