GOOD MORNING! STOCKS
Not very clear trends in global Equities. Slight inclination towards bearishness, or caution at best. No immediate bullishness for sure.
It is not encouraging for Bulls that the Dow (17619.51, +0.13%) rose to an intra-day high of 17714.66 to test Resistance there, but fell back to close only marginally higher. We could see a dip to 17500 in the very near term.
The Dax (10944.97, -1.25%) should have decent Support coming up in the 10800-600 region. The current downmove since 11600 could be slowing down a bit.
The Shanghai (4287, +0.23%) saw a sharp bounce back yesterday itself, recovering all of Monday's losses. But, it has important Resistance at 4400. Traders and investors of most hues would have been decimated in the wild moves in the Shanghai over the last few days. We doubt if anyone has the cash and appetite to buy anymore. We think a prolonged sideways range between 4400-3500 can emerge.
Not much movement has been seen in the Nikkei (20280, +0.28%) since yesterday. It still looks a little flat and top heavy with chances of seeing 19900-800 on the downside. Need to see a strong rise past 20400 to negate this view.
Looking at the above indices, the Nifty (8368.50, +0.6%) has been a relative outperformer and can test 8400 today. Need to see if it rises past that or not.
Brent (62.96) has bounced sharply from 61.36 yesterday and near term range is becoming narrower within 61.36-64.00. We may soon see a break out from this range preferably on the upside towards 65-66 levels. See chart: http://www.kshitij.com/graphgallery/brentcrudecandle.shtml#candle
WTI (58.78) has also risen from support on the daily chart. We may expect a rise towards 62 in the coming sessions.
Gold (1177.07) has been making lows below 1170 since the last week. Daily chart has near term support but the weekly shows some room on the downside towards 1150-1125-1100. Need to keep an eye on this. See charts:
Silver (15.71) has immediate support near 15 but if that breaks it may move lower towards 14.5-13 levels. It is in a downward channel. See chart: http://www.kshitij.com/graphgallery/coppercandle.shtml#candle
Copper (2.6155) has come down from resistance near 2.65 mentioned in the previous editions. We may see movement in the 2.56-2.65 region before an eventual break above 2.65. Medium term is bullish towards 2.70-2.75.
Currencies are moving in line with the broad expectations outlined yesterday. Today's update carries very near term views.
The Euro (1.1132) is down within its broad range of 1.0950-1300. Expect intra-day Support near 1.1075 today.
As suggested, Dollar-Yen (122.52) has bounced slightly from the Support on the 3-day Candles and could move up a bit to 123.15 in the near term. See second chart on the following page:
The Euro-Yen (136.40) trades a little lower than yesterday in line with the indicated bearishness. But, there could be Support near 135.40, inside the Candle traced on Monday and above the 134-135 Support mentioned yesterday.
Eerie quiet in the Pound (1.5693) over last couple of days. Potential exists to dip to 1.56 and then bounce from there towards 1.57. The Aussie (0.7724) is rising well in line with our expectation of a rally towards 0.7800.
Dollar-Rupee (63.65) could be inclined for a dip towards 63.50-30.
German yields are down. The 5Yr (0.073%), 10Yr (0.763%) and 30Yr (1.53%) are all down from 0.080%, 0.778% and 1.566%. German-US 10Yr differential (-1.61%) has fallen sharply but is testing support near current levels and may see a bounce in the coming sessions. Volatility has increased in the Euro-zone area on concerns over Greece. Near term view is unclear just now.
US bond yields are mixed. The 2Yr (0.64%) is down 1bps and the 5Yr (1.65%) yield is stable while the 10Yr (2.37%) and 30Yr (3.14%) have risen from 2.34% and 3.10% respectively. See chart: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00
The UK yields are trading lower and look weak in the near term. The 5Yr (1.49%), 10Yr (2.0%) and the 20Yr (2.55%) are down from 1.53%, 2.04% and 2.58% respectively. See charts:
The UK-US 10Yr (-0.36%) has sharply fallen from -0.30% and may fall further in the coming sessions. See chart: http://www.kshitij.com/graphgallery/gbpusddiff.shtml#gbpusd
23:30 GMT or 5:00 IST AU PMI
...Previous 52.3 ...Actual 44.2
23:50 GMT or 5:20 IST JP Tankan Large Manufacturers Index
...Expected 12 ...Previous 12 ...Actual 15
1:35 GMT or 7:05 IST JP PMI
...Expected 49.9 ...Previous 49.9 ...Actual 50.1
1:45 GMT or 7:15 IST CN PMI
...Expected 50.5 ...Previous 50.2 ...Actual 50.2
7:30 GMT or 13:00 IST CH PMI
...Expected 50.1 ...Previous 49.4
8:00 GMT or 13:30 IST EU PMI
...Expected 52.5 ...Previous 52.2
8:30 GMT or 14:00 IST UK PMI
...Expected 52.6 ...Previous 52.0
12:15 GMT or 17:45 IST US ADP Emp
...Expected 216 K ...Previous 200 K
14:00 GMT or 19:30 IST US Manufacturing ISM
...Expected 53.2 ...Previous 52.8
...Expected 0.40 % ...Previous 0.38 % ...Actual 0.37 %
...Expected 0.1 % ...Previous -0.2 % ...Actual -0.1
US Case Schiller
...Expected 5.30 % ...Previous 5.04 % ...Actual 4.91 %
US Cons Conf
...Expected 97.1 ...Previous 94.6 ...Actual 101.4
UK Cons Conf
...Expected 2 ...Previous 1 ...Actual 7