S&P 500 (Sep 10) INTRADAY
Review “Merger-Monday” saw equities open higher but nevertheless finish in negative territory as some of the initial opti-mism waned, with visible underperformance seen in the tech sector throughout. Despite following a range bound trading pattern for much of the session; stocks broke out to the downside and printed fresh lows in the closing hour of trade ahead of Tuesday’s key housing data. At the close the e-mini S&P 500 closed down 0.40% at 1065.50
Strategy The Nikkei (-1.33%) dropped below the closely watched 9,000 point mark for the first time in 15 months over night after US stocks weakened, with a pickup in corporate takeover activity failing to soothe concerns that the recovery is stalling. European markets are all in negative territory this morning as nervousness builds ahead of today’s important US economic data Existing Home Sales an-nounced at 15.00. Recent disappointment in the US housing market is beginning to drag on consumer sentiment and therefore overall economic recovery. The flight to quality continues.
Alternative Scenario A better than expected Existing Home Sales may lead a retracement of some of the recent sell off and a move back above the 50% Fib level at 1066
EUR/USD INTRADAY
Review EUR/USD continued its recent downward trend yesterday as the broad based flight-to-quality move continues. Inves-tors are reducing risk within portfolios which is lead to a strengthening dollar against almost all other currency pairs. A new 6 week low was set yesterday at 1.2664 with almost 50% of the June/July rally having now been retraced.
Strategy Further negative sentiment this morning has extended the dollar strength with the low of the day so far being right on the 50% Fibonacci Retrace-ment level at 1.2606. USD/JPY spiked below 84.73 to set a new 15 year low with the EUR/JPY setting a new 9 year low. European equity markets are all in nega-tive territory this morning as nervousness builds ahead of today’s important US economic data Existing Home Sales announced at 15.00. Recent disappointment in the US housing market is beginning to drag on consumer sentiment and there-fore overall economic recovery. The flight to quality continues.
Alternative Scenario A better than expected Existing Home Sales may lead a retracement of some of the recent sell off and a move back above Friday’s low at 1.2664
Crude Oil (Oct 10) INTRADAY
Review Oil declined for a fifth day on speculation U.S. crude and fuel inventories increased last week as economic growth slows. Oil fell to a seven-week low as the dollar strengthened against the euro, undermining investors’ need to hedge against infla-tion using dollar-priced assets. U.S. crude supplies probably rose last week while distillate fuel stockpiles may hit the highest level in 27 years, a Bloomberg News survey shows.
Strategy Further negative sentiment this morning has extended the sell off with the oil price having now moved below the July low at $72.65 and $72.00 being tested as I type. The next major support level is the October contract May low at $70.30. The USD and JPY have continued to strengthen with all European equity markets also in negative territory this morning as nervousness builds ahead of to-day’s important US economic data Existing Home Sales announced at 15.00. Re-cent disappointment in the US housing market is beginning to drag on consumer sentiment and therefore overall economic recovery. The flight to quality continues.
Alternative Scenario A better than expected Existing Home Sales may lead a retracement of some of the recent sell off and a move back towards Friday’s low at $73.43
