Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Dow Stock Market Trend Forecast Update - 21st Sep 19
Is Stock Market Price Revaluation Event About To Happen? - 21st Sep 19
Gold Leads, Will the Rest Follow? - 21st Sep 19
Are Cowboys Really Dreaming of... Electric Trucks? - 21st Sep 19
Gold among Negative-Yielding Bonds - 20th Sep 19
Panicky Fed Flooding Overnight Markets with Cash - 20th Sep 19
Uber Stock Price Will Crash on November 6 - 20th Sep 19
Semiconductor Stocks Sector Market & Economic Leader - 20th Sep 19
Learning Artificial Intelligence - What is a Neural Network? - 20th Sep 19
Precious Metals Setting Up Another Momentum Base/Bottom - 20th Sep 19
Small Marketing Budget? No Problem! - 20th Sep 19
The Many Forex Trading Opportunities the Fed Day Has Dealt Us - 19th Sep 19
Fed Cuts Interest Rates and Gold Drops. Again - 19th Sep 19
Silver Still Cheap Relative to Gold, Trend Forecast Update Video - 19th Sep 19
Baby Boomers Are the Worst Investors in the World - 19th Sep 19
Your $1,229 FREE Tticket to Elliott Market Analysis & Trading Set-ups - 19th Sep 19
Is The Stock Market Other Shoe About To Drop With Fed News? - 19th Sep 19
Bitcoin Price 2019 Trend Current State - 18th Sep 19
No More Realtors… These Start-ups Will Buy Your House in Less than 20 Days - 18th Sep 19
Gold Bugs And Manipulation Theorists Unite – Another “Manipulation” Indictment - 18th Sep 19
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

December Dual Trading in Progress: Views From Inter Market

Stock-Markets / Financial Markets 2011 Dec 18, 2011 - 12:40 PM GMT

By: Capital3X

Stock-Markets

Best Financial Markets Analysis ArticleDecember is tracing our views till now. First a rally to 1260 on SP500 and then a muted correction to the confluence zone at 1210 and culminating a rally back to 1250/60 zone area to finish a rather eventful and volatile year which once again brought to the fore the broken structure of the world economy.

We present key major currency charts and macro economic analysis to validate our views.


USD/CAD Daily Charts

USD/CAD continues to consolidate in the upward triangle with both slants of the triangle being well respected. We expect USD/CAD to now test the lower boundary. Right now neither the stochs nor the vortex gives credence to our views and therefore it is a mere hypothesis but as we will see through USD/CHF charts, there could more to this view.

AUD/USD Daily Charts

AUD/USD validates USD/CAD almost pip to pip and therefore does not add any news info. As in the case of USD/CAD, AUD/USD consolidates inside the triangle. But the looming confluence zone at 1.0180/02 zone is of special interest at 50 and 100 MA work along side the down trend line from 1.08 levels. We expect the level to be tested which will give strong support to a risk rally in the next 2 weeks.

USD/CHF Daily Charts

USD/CHF is the only chart from all the major pairs which have moved in advance to indicate that Risk rally could begin soon. USD/CHF has broken trend lines and is targeting .930 levels which should release enough liquidity into the system to sustain a rally on all risk assets. USD/CHF is among the finest benchmarks of the DXY index and therefore is used quite heavily in the intermarket analysis. Unlike AUD/USD and USD/CAD, USDCHF stochs have already moved to indicate a short term down move to test key levels.

SP500 Daily Charts


10 Year yields moves in range

US treasury yields are off their all time lows and are now consolidating below multiple MAs capping its rise. The confluence zone at 2.1 level should attract interest towards the year end.

EU PMISs: A false sense of security?

The purchasing managers’ indices (PMIs) for the euro zone surprised to the upside in December. In contrast to what was widely expected, they did not fall any further but rose slightly. This certainly reduces the risk of a steep drop in activity in the euro zone. However, we think it would be premature to say that this marks a turn for the better as the sovereign debt crisis will continue constraining economic activity in the euro zone for a long while yet.

US production muted

US industrial production declined 0.2% in November. While the headline number disappoints, the details of the report are less negative. All in all, the report is consistent with an ongoing moderate expansion of US industry. At first sight, industrial production’s 0.2% decline in November disappointed relative to
expectations. The October basis, however, was revised upward by three tenths. A relatively modest number for November had already been foreshadowed by the employment report which showed that production workers in the manufacturing sector worked fewer hours. Indeed, in the ‘core’ manufacturing sector, production declined even 0.3%, but this was largely the consequence of supply constraints in the car industry in the wake of flooding in Thailand as motor vehicle and parts output slumped 3.4%. It is to be seen if the effect can be reversed over the coming months.

On the debt side, Italy continues to make progress on the debt and deficit management. But markets will need greater credible proof as Italy has been found the fudge numbers.

According to the latest figures, Italy made progress on budget consolidation in October. The country is now ahead of target: The deficit goal for 2011 of 3.9% of GDP is therefore within reach. The VAT increase has led to a significant rise in revenues. The Monti government’s new reform package increases the chances of a balanced budget by 2013. The new figures from the Banca d’Italia show that the budget deficit was significantly reduced in September. In the first ten months of 2011 the deficit was € 9.3bn less than in the same period of 2010. This corresponds to 0.6% of GDP (black bar in chart). The government’s aim is to reduce total new public borrowing this year to just 0.5% of GDP. The income and expenditure situation of the Italian government is even expected to improve further in the last two months of the year: In mid-September VAT was increased by one percentage point, which should lead to higher revenues in November and December. Italy’s new prime minister Mario Monti is planning further cuts. A key component of the austerity package is the reintroduction of property tax (approx. € 3.5bn p.a.). There will also be increases in excise duties on luxury goods, for example. On the expenditure side, the planned pension reform stands out. The package increases the likelihood that, despite a weak economy (the government now shares our view that the economy will shrink slightly in 2012 and see little growth in 2013), Italy will have a balanced budget from 2013 onwards. The package should be adopted by the Chamber of Deputies today, combined with a vote of confidence (final vote 6pm, vote of confidence around midday). The Senate will vote on Sunday.

There is a lingering rumor that France is to be downgraded and will become the second major economy to be downgraded after US. We knew a downgrade on US was coming and so did the markets, and yet when it did come, markets were walloped. If France is actually downgraded (We see less of a chance of that), expect the contrarian case of all the charts above which means we could see a further fall in risk assets and USD/CAD to break out of its ascending triangle.

You can log in to the C3X live trading room to be notified of the latest market events as they occur. It is also a room where we discuss our premium trades.

We continue to watch the price action and will update our premium subscribers with new analysis and charts. Our trade portfolio (Forex, SPX Emini, Crude, Gold, Silver) is visible to our premium subscribers

Our feeds: RSS feed
Our Twitter: Follow Us

Kate
Capital3x.com
Kate, trading experience with PIMCO, now manage capital3x.com. Check performance before you subscribe.

© 2011 Copyright Capital3X - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules