Global Equity Monitor: Techno-Fundamental Research & Analysis

By Joel Kruger and David Schutz,
  • US equities remains very well bid; 100-Day SMA now key indicator
  • UK equities should find formidable resistance by psychological barrier
  • German equities break through key level; additional gains limited
  • Japanese equities at risk for major corrective declines
  • Australian equities remain well offered on rallies

US30 (Dow)

Technical : The market remainsexceptionally well bid and while we continue to project a bearishreversal ahead, there is no clear sign of any such development justyet. We had been looking for a break back below the 20-day SMA toconfirm our bias but this proved to be a faulty signal and we willnow defer to a break below the 100-Day SMA for bearishconfirmation. Until then, the uptrend remains intact.

Fundamental: The Fed’sreluctance to mention any future reversal of its current ultraaccommodative policy has investors scrambling to borrow more cashto (possibly artificially) prop US equity markets. Meanwhile, thefallout from an incriminating NewYork Times op-ed by an ex-GoldmanSachs employee continues on Wall Street, with the investmentbanking giant losing $2.15 billion of its market value. Elsewhere,private equity profits remain on the line as President Obamacontinues to urge for higher taxes on equitymanagers’ compensation .

UK100 (FTSE)

Technical : Although the market hasmanaged to mount an impressive rebound since breaking down from2012 highs at 5,964, we see any additional rallies as limited, withthe greater risk for the formation of an interim top aroundpsychological barriers at 6,000. Look for a break back below 5,900to help confirm outlook.

Fundamental: D ays before Chancellorof the Exchequer Osborne is set to present hisannual budget, Fitch has revised its s overeign r ating o utlook for the UK to negative.The rating agency said risks losing its topinvestment grade because of its limi ted ability to dealwith market shocks. Meanwhile, a chiefgovernment scientific advisor has said the UK is heading for powerblackouts within five years unless the government devises a betterstrategy to build new nuclear plants .

GER30 (DAX)

Technical : While the market hasmanaged to post a significant recovery rally and extend gains tofresh 2012 highs, we still see the prospects for recent ralliesbeyond 7,000 as limited with the greater risk for the formation ofa medium-term top in favor of a deeper decline over the comingweeks. Look for a break and close back under 7,000 to confirm andaccelerate.

Fundamental: European equities havebeen remaining strong, as delays in the Greek bailout have causedthe primary burdens to shift away from banks and onto taxpayers. The European CentralBank in its monthly report today said it sees signs ofstabilization in the economy. Officials said that given thesesigns, the central bank will look to exit its current crisismeasures in a timely manner .

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 9,500 area before consideringpossibility of a bullish resumption.

Fundamental: Markets remain incredibly well bid in Japan, with the Nikkei extending to an eight-month high. The Yen today dropped to an 11-month low against the US dollar. Solid US economic growth was thought to be behind the move, which boosted the outlook of exporters concerned with foreign purchasing power in Japan.

AUS 200 (ASX)

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

Fundamental: Aussie equity marketsseemed unaffected by an overnight weakening in the Australiandollar and Kiwi caused by a weakening in New Zealand consumerconfidence ahead of today’s US jobless claimsreport.

--- 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/2012/03/15/Global_equity.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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