The collision of global markets and social mood

Thursday, November 12, 2015

Thursday -- Spooky Doves

S&P E-mini Futures:
Dropping as Europe digests latest ECB comments. Looks like a falling wedge pressuring the ES 2062 area.

Draghi seems to have spooked the markets by trying to sound dovish.

From Bloomberg: “Signs of a sustained turnaround in core inflation have somewhat weakened,” the ECB president told a hearing in the European Parliament in Brussels on Thursday. “Downside risks stemming from global growth and trade are clearly visible.”

Should officials “conclude that our medium-term price-stability objective is at risk, we would act by using all the instruments available within our mandate to ensure that an appropriate degree of monetary accommodation is maintained,” Draghi said.

So yet again he has inferred "whatever it takes."

Yet Europe is down hard on the news and the EUR has largely reversed a slide. Not good action.

Sooner or later the markets will figure out what the dollar has known for a while: that the real problem is debt deflation.

Meanwhile, stateside looks to be dominated by Fedspeak today for added investor confusion. ZH kindly provided a list and times.

Positive jobs numbers, the best since 2012, sent AUD ripping higher. USD consolidating recent gains. NOK hammered again on oil weakness.

Prices looking pretty weak.

WTI crude should hit new lows. NG set up a little better for now.

Coper hammered. Gold and silver oscillating flat +/-.

S&P Outlook:
As noted above, the E-minis look like a falling wedge with a line in the sand at the 2062 area. This equates to the 2068 area on the cash S&P.

Yesterday there was every chance to rip higher yet the markets couldn't. Instead two new lower Fib targets were created on the S&P at 2057.13 and 2038.70.

To reiterate, should equities figure out what USD and credit already seem to know, it could mean much lower prices. When that might happen is anyone's guess.

It might even cause the Fed to try to get in front of it first with some sort of "unexpected accommodation," yet doing so would further tarnish their credibility.

Regardless, I still think that the S&P is presently signaling a corrective move before yet higher prices.

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