The collision of global markets and social mood

Monday, March 13, 2017

Monday -- India & Dutch Elections, Fed, G-20

S&P E-mini Futures:
Hovering flat with a slight greenish tint.

Social Mood:
If you want to know how social mood can affect politics, look to India which, in Elliott terms, has been in a large degree third-wave rally since the 2009 lows.

Prime Minister Narendra Modi’s party just won "a landslide victory" in elections to the state assembly, as he "cemented his place as India’s most powerful leader in two generations," with "every major competitor confused, defeated or in decline," according to Bloomberg.

All this after trashing 86% of the country's currency and inflicting much pain and despair among hundreds of the millions of the country's poorest.

Instead, Modi was credited with the opposite. "Voters believed the move hurt the corrupt rich much more than it did anyone else."

That's the beneficial affects of positive social mood for you.

Modi's Path Is Cleared, But Unclear

It's a different mood in Europe, however, where far-right nationalist movements continue to gain ground with seemingly every news item, the latest being Turkish President Erdogan's incendiary comments, labeling the Dutch "Nazis."

Dutch Election Upended as Turkey Dispute Seen Aiding Wilders

This has energized Geert Wilders' Freedom Party just as polls showed it fading. And the spillover could help far-right French candidate Marine Le Pen as well.

This week's Dutch parliamentary elections should be the next key gauge of social mood in Europe.

Notable that the Fed meeting and the G-20 all take place this week as well.

The latest positive mood cue here in the US:

Intel is reported to be purchasing Mobileye in a deal for $16 billion, "52% above Mobileye's market capitalization of $10.5 billion as of Friday's close."

That's optimism.

Interestingly (and perhaps related?), BlackStone's Steve Schwarzman, one of Trump's top economic advisers, said Sunday on CNN that Trump will likely temper his criticisms of China, just as Goldman Sachs flip-flopped overnight on its long-standing bearish position over Chinese stocks, and "joined the rush on Chinese shares."

As a reminder, Trump's cabinet is a virtual Goldman Outpost.

Not much yet. GBP stronger.

It's been a rowdy few days for Bitcoin the SEC rejected a "Bitcoin ETF." It has recovered most of its declines since reaching the 1085 level.

Still noticing Italian yields continue higher relative to Spanish yields. Probably not a great sign.

US treasuries starting the day red again.

WTI crude down, NG gapped higher, up another 1+%, but possibly fading.

Everything green today: gold, silver, platinum, palladium, and copper.

S&P Outlook:
Friday saw the S&P make progress toward the 2380 area. That's about it. The rally felt weak.

The cluster of higher targets remains: the 61.8% retracement at 2383.24, the 2383.89 swing point, and a gap at 2383.12.

2354.54 remains key to the downside. A break of that level without getting to the 2380 area first could bring trouble.

But here was the way things looked intraday, noting how lower levels could be accommodated.

Note: not for timing purposes, and not real Elliott labels.

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