Chart Update as the Spanish and Italian indices start approaching some short term support levels
The Trader has been bearish on (especially) the Spanish and Italian markets over the past weeks. Our short term targets are approaching, and despite our negative views on the economy of those countries, we feel that the short term probabality of further declines is getting somewhat limited. If you have been short thhese markets as we advised, it is time to cover those shorts/try a small long at these extremely oversold levels.
A few weeks ago, not many wrote of the problems in Spain, but all we read now is regarding the Spanish flue hitting everything. Yes, that is true, but don’t forget, the Spanish market has already plunged 17% in a few weeks. Charts update below.
Risk Off in US trading
First signs of some real action today. A mini sell off. Let’s see if we get follow through or if investors will buy this Alice in Wonderland scenario? Greece is on fire. Occupy movement shouting louder by the day. What could possibly go wrong?
OIL
News That Matters
Ft.com
Chinese stocks led a broad-based decline in Asian markets after data showing the world’s second-largest economy grew at its slowest pace in two years, the FT reports. China’s Shanghai Composite index lost 1.3 per cent with slowing economic growth sparking fears of a hard landing and the MSCI Asia Pacific index was off 1.2 per cent, http://ftalphaville.ft.com/thecut/2011/10/18/704216/chinese-gdp-data-leads-to-asian-markets-fall/
Apple has sold a record 4m of its latest incarnation of the iPhone in its first three days on sale in spite of criticism that the new product was a more limited technological leap forward than its predecessors,http://ftalphaville.ft.com/thecut/2011/10/17/704171/iphone-4s-sales-hit-record-4m-on-launch/
Citigroup’s investment bank weighed on its third-quarter performance, with derivatives positions and proprietary trading – which is set to be banned under new regulations – helping drag down overall revenue, http://ftalphaville.ft.com/thecut/2011/10/17/704146/citigroup-earnings-jump-74-to-3-8bn/
The improvement in US mortgage delinquencies has flattened or reversed, according to quarterly earnings from three of the four biggest US lenders, sparking fresh fears over the resilience of the American consumer, http://ftalphaville.ft.com/thecut/2011/10/17/704126/improvement-in-us-mortgage-delinquencies-ends/
News That Matters
Ft.com
Asian shares rose on Monday and the euro held near a one-month high amid hopes that a crucial week for the eurozone crisis will see policymakers finally come up with a plan to resolve the region’s debt woes and recapitalise its banks,http://ftalphaville.ft.com/thecut/2011/10/17/703106/rising-markets-adds-to-pressure-for-eurozone-deal/
Regulators ordered MF Global Holdings, the brokerage firm led by former New Jersey governor Jon Corzine, to boost its net capital in August after they grew concerned about its exposure to European debt,http://ftalphaville.ft.com/thecut/2011/10/17/703126/mf-globals-eurozone-exposure-led-to-capital-boost/
Barack Obama, US president, offered more support for protesters against the global financial system after a weekend of demonstrations in cities around the world, but called on them not to “demonise” those who worked on Wall Street.http://ftalphaville.ft.com/thecut/2011/10/17/703101/obama-indicates-support-for-ows/
Singapore’s exports unexpectedly fell in September as weakening expansion in the world’s biggest economies eroded demand for electronics and petrochemicals, says Bloomberg. Non-oil domestic exports fell 4.5 per cent from a year earlier, http://ftalphaville.ft.com/thecut/2011/10/17/703056/singapore-exports-unexpectedly-decline/
News That Matters
Ft.com
Raj Rajaratnam, the billionaire US hedge fund manager, was on Thursday sentenced to 11 years in prison, the longest term for insider trading in recent times, reports the FT. The prominent Wall Street financier was also ordered to pay a $10m fine, http://ftalphaville.ft.com/thecut/2011/10/14/702276/rajaratnam-sentenced-to-11-years-in-jail/
JPMorgan Chase produced an uninspiring start to the bank earnings’ season, reporting flat year-on-year earnings after a torrid summer hit investment banking revenues and offset improvements in the consumer business, http://ftalphaville.ft.com/thecut/2011/10/14/702256/jpmorgan-fails-to-inspire-despite-accounting-creativity/
Google’s latest quarterly earnings soared above most analysts’ forecasts as the internet search company rebounded to its highest growth rate since before the 2008 financial crisis and shrugged off recent signs of economic weakness, http://ftalphaville.ft.com/thecut/2011/10/14/702221/google-shares-soar-on-higher-earnings-mulls-itunes-rival/
News That Matters
Ft.com
Three bilateral trade agreements passed the US House of Representatives and Senate on Wednesday. But the votes came with a sense of relief rather than celebration from their supporters, and resignation rather than anger from their opponents, http://ftalphaville.ft.com/thecut/2011/10/13/701141/congress-agrees-trade-agreements/
Apple has won an important legal battle in a Sydney court to block rival Samsung Electronics from selling its Galaxy Tab 10.1 in Australia ahead of the crucial Christmas shopping season, the FT reports. In a blow to Samsung,http://ftalphaville.ft.com/thecut/2011/10/13/701101/australian-court-blocks-samsung-tablet/
Growth in Chinese trade slowed significantly last month as the effects of the economic turmoil hitting its most important trading partners in Europe and the US, the FT reports. Overall Chinese exports increased 17.1 per cent in September from a year earlier, http://ftalphaville.ft.com/thecut/2011/10/13/701061/news-corp-questioned-over-circulation/‘
China has for the first time revealed the estimated size of its copper inventories, implying the country’s consumption may have been lower than thought, the FT says. Chinese copper inventories stood at 1.9m tonnes at the end of 2010,http://ftalphaville.ft.com/thecut/2011/10/13/701026/china-reveals-size-of-copper-inventory-2/
Leading European banks say they would rather sell assets than raise expensive new capital to meet compulsory demands from the European Union for higher capital ratios, threatening a further contraction of credit to the enfeebled eurozone economy, http://ftalphaville.ft.com/thecut/2011/10/13/701001/eu-banks-could-shrink-to-hit-capital-rules-2/
Trichet speaks-HFT Listens
As Trichet is speaking, and HFT listening, markets move as usual on no volume, where the speed of light is determining bid/offer spreads. Before considering buying this no volume melt up we have witnessed lately, please review some of the news Trichet is delivering.
*ECB’S TRICHET SAYS CONTAGION THREATENS FINANCIAL STABILITY – BLOOMBERG
*TRICHET SAYS LIQUIDITY AND FUNDING RISKS ARE `HEIGHTENED’ – BLOOMBERG
*TRICHET SAYS EURO CRISIS HAS REACHED `SYSTEMIC DIMENSION’ -BLOOMBERG
And the reaction….
News That Matters
Ft.com
Apple co-founder and former chief executive Steve Jobs, regarded as one of the most important American leaders of his generation, died on Wednesday at the age of 56, the FT reports, after a long struggle with pancreatic cancer. His death was announced late on Wednesday by Apple’s board, http://ftalphaville.ft.com/thecut/2011/10/06/694506/apple-co-founder-steve-jobs-dies/
Citic Securities, China’s biggest brokerage by market value, declined in its Hong Kong trading debut, Bloomberg reports. Shares in the company fell fell as much as 11 per cent to HK$11.90 and traded at HK$12.2 at 11:01am. http://ftalphaville.ft.com/thecut/2011/10/06/694646/citic-securities-shares-falls-in-hong-kong-debut/
Thousands of people, including representatives of several trade unions, marched through the streets of lower Manhattan on Wednesday in an escalation of the “Occupy Wall Street” demonstrations that began last month, http://ftalphaville.ft.com/thecut/2011/10/06/694596/wall-street-protest-numbers-grow/
Bearish hedge fund managers have reaped some of their biggest gains since the collapse of Lehman Brothers amid the market turmoil triggered by the eurozone debt crisis, the FT reports. Funds reaping big gains include Brevan Howard’s $24bn flagship fund, http://ftalphaville.ft.com/thecut/2011/10/06/694576/hedge-fund-bears-win-on-eurozone-crisis/
Early Chart Update
SPX Channel still intact, despite last night’s Panic buying. Market still bouncing back and forth playing with people nerves. Early morning action in Europe is rather dull, so far…
SPX Channel
Rebound 2.0 as banks regain some momentum, but don’t get too exited, yet.
Markets rebounding further, after the momo investor sold the World in Panic earlier today. Gold getting sold further, while the much hated US banks rebound. Watch out above.
Banks climbing after the initial sell off.
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