As I suspected the Swiss team are very much where they were a week ago. Insufficient levels have really be broken here. This should come as no surprise until one of the major central banks takes meaningful monetary action. The technicals are confirming the fundamentals of where we are at present. Its a case of no one can commit directionally until a central bank acts.
On the positive side they sight the price action in gold (1630 key), silver (28.30 key), platinum and the recent action in the Shanghai.
I’d supplement these comments on the Shanghai action with the excellent technical team in the region:
http://www.stocktiming.com/Shanghai_Daily_Stock_Market_Updates/shanghai-index-update-monday.htm
The implications for the industrial sector are clear if the Shanghai has formed a major base.
The US finance sector indexs look more positive to me that the Swiss team indicate. The Euro finance sector at a key res as they point out.
They are bullish the US$ and bearish euro and yet they are bullish material stocks and the reflation trade. I find this correlation hard to imagine as being sustainable. If the ECB monetizes the euro should be supported. The DX should decline in value especially vs cad, aud, etc if this occurs. For the dollar to rise meaningfully a deflationary scenario would have to be in play. The Shanghai would reverse and the up move fail. The supports listed on copper etc would give and the world would quickly enter a deleveraging scenario on a meaningful basis. Central banks would react but not before a major market move occured, imo.
Anyway, here the report.
I agree we are at key levels on all sorts of instruments. All eyes to the ECB. And we need to carefully understand the detail of what the ECB and ESM do. The initial reaction could easily occur in the wrong direction but the devil will be in the detail.
All the best and careful trading out there.
Rich
p.s. A comment on the ftse. The ftse is a materials and financial index listed in gbps. A combination of a weak domestic economy but inflationary (ie lose monetary world wide enviroment) as well as a meaningful Shaghai bounce would set the ftse on fire to the upside. Im not saying this will occur here im merely pointing out that as a tracker for the inflation play the ftse100 is a very good instrument to play it with leverage. Good liquidity and plenty of instrument choice. Achieving a good return in this game is a great deal about chosing the right tool for the job at the right time. The ftse at this make or break moment can provide the beta in both directions but due to the local currency debasement and domeestic weakness especially so to the upside! I’ll happily continue this specific discussion on the forum pages.
(7 votes, average: 5.00 out of 5)
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