Global Equity Monitor: Techno-Fundamental Research & Analysis

By Joel Kruger and David Schutz,
  • US equities could finally be poised for break below 20-Day SMA
  • UK equities finally starting to roll over to expose deeper setbacks
  • German equities getting closer to closing below 20-day SMA
  • Japanese equities showing signs of short-term topping
  • Australian equities seen heading back to multi-day range lows

US30 (Dow)

Technical : Although the market hasbeen very well bid in recent weeks, we are starting to see signs ofexhaustion and will be looking for a pullback over the comingsessions. The key indicator to watch is the 20-Day SMA, and a breakand close below will be used as confirmation for the onset of somebearish price action likely to result in a period of multi-dayselling. Inability to close below the 20-day however will keep thebullish structure intact.

Fundamental: US equity futures tooka hit today as it was revealed that the European economy shranksome 0.3 percent in 2011’s fourth quarter. Thenews was in line with expectations, but that didn’t stop DowJones futures from losing 84 points, or 0.7 percent in London tradetoday. China yesterday cut its economic growth target, and ordersto American factories decreased for the first time in threemonths.

UK100 (FTSE)

Technical : The latest close belowthe 20-Day SMA is significant here and could now trigger a healthyand needed pullback in this market. Look for a break below 5,829 toconfirm and accelerate declines towards 5,650 over the comingsessions. Back above 6,000 negates and gives reason forpause.

Fundamental: UK stocks took a hittoday as weak Chinese growth forecasts, underperformance in USfactory orders, and concerns over a possible delay in Greek PSIdevelopments weighed on market sentiment. Market players areanxiously waiting to see if Greece will get the support it needsfrom its private creditors to proceed with the European debt swap.Meanwhile, UK retail sales fell for a second month in February as adrop in purchases of clothing countered gains at foodstores.

GER30 (DAX)

Technical : No major signs ofreversal just yet despite daily studies tracking into overboughtterritory on the daily chart. Still, while the up-trend remainsintact, there are risks for a significant short-term pullbackahead. Look for a break below the 20-day SMA to confirm short-termshift and open the door for an acceleration of declines. Above7,000 delays bearish outlook and gives reason for pause.

Fundamental: The expectedcontraction of the Euro zone economy by some 0.3% was confirmedtoday, sparking a fresh wave of risk aversion which saw Europeanmarkets take a tumble. Also serving to bolster a bearish outlookwere new speculations that Greece will be unable to complete thedebt swap agreed upon with Europe. News today emerged that theprivate investors who have already agreed to participate in theswap hold about 20% of Greek debt. Greece is now thought to beconsidering delaying its PSI deadline until next Wednesday fromthis Thursday.

JPN225 (Nikkei)

Technical : Daily studies arefinally starting to correct from violently overbought levels and wewould recommend that bulls proceed with caution over the comingdays. From here, short-term risks are tilted to the downside sothat technical studies can unwind from these overextended readings.Look for a pullback towards the previous resistance now turnedsupport by the 200-Day SMA in the 9,000 area before consideringpossibility of a bullish resumption. Last Wednesday’s high by9,863 could now represent a meaningful short-term top.

Fundamental: A strengthening Yen hasserved to reduce Japanese exporters’ outlooks as thenation’s energy companies are start to feel the impact ofrising oil prices . Moreover,China’s shift away from exports and investment has weighed onJapanese shipping companies and machinery makers.

AUS 200 (ASX)

Technical : Rallies have been wellcapped above 4,300 as we had anticipated and the market is in theprocess of rolling back over in favor of a bearish decline towards4,165. A break below 4,165 will then accelerate setbacks and expose4,100 and the 4,000 further down. Ultimately, only a daily closeback above 4,315 gives reason for pause.

Fundamental: The RBA’sdecision to keep interest rates unchanged, instead of adopting amore accommodative stance in the face of the global economiccool down, was thought to be influencing the large drops seen heretoday. RBA officials left open the door for the possibility of acut in rates in the near future. Elsewhere, Australia’sgovernment commodity forecaster today mentioned that w heat crops worldwidewill probably decline 2 percent in the year starting July 1, asyields return to average after this seasons’ recordproduction.

--- Written by Joel Kruger, Technical Currency Strategist

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DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/03/06/Global_Equity_Monitor_Techno-Fundamental_Research.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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