Global Equity Monitor: Techno-Fundamental Research & Analysis

By Joel Kruger, Technical Strategist David Schutz,
  • US equities still showing signs of topping in 2012
  • UK equities stall by key support, but fresh weakness expected
  • German equities settle back under key psychological barrier
  • Japanese equities at risk for major setbacks over coming days
  • Australian equities stalling in familiar territory; look to sell

US30 (Dow)

Technical : We could finally beseeing the formation of some form of a top in 2012, with dailystudies looking stretched and the market starting to show signs ofpotential exhaustion. Look for added confirmation on a break anddaily close below 13,000 over the coming sessions. This could thenopen an accelerated decline back towards the 12,500-12,750 area ata minimum.

Fundamental: Positive manufacturingnumbers out of China, Europe, and Great Britain did little to propUS markets as US equity futures erased earlier gains ahead oftoday’s US manufacturing report. The market impact of thereport remains to be seen. Meanwhile, the S&P 500 is beatinggold by the most in a decade, as 2012’s first quarter broughtthe benchmark index its strongest Q1 gains in years. Goldman Sachstoday recommended going long the S&P.

UK100 (FTSE)

Technical : Recent setbacks havestalled for now ahead of some key support by 5.700. However, westill project weakness over the coming days and look for a clearbreak below 5.700 to open the next major downside extension towardsthe 200-Day SMA by 5,575 further down. Ultimately, only back above5,900 delays and gives reason for concern.

Fundamental: A report today saidthat UK house prices rose in March for the first time in 21 monthsas buyers rushed to beat the expiration of a property-taxexemption. A positive PMI manufacturing reading today was thoughtto bolster sentiment in the UK. Meanwhile, the world’slargest liquor maker Diageo has appointed Goldman Sachs and HSBCfor advice on gaining control of tequila maker JoseCuervo.

GER30 (DAX)

Technical : Rallies to fresh 2012highs beyond 7,000 have indeed been very well capped and wecontinue to see the greater risk for the formation of a medium-termtop in favor of a deeper decline over the coming weeks. Look forthe latest break back below 7,000 on to confirm negative outlookand open an acceleration towards next key support in the6,600-6,750 area.

Fundamental: The Euro-areamanufacturing sector experienced positive results overall in March,sending the single currency past yesterday’s highs againstthe dollar and bolstering bids intraday against the Yen. The GermanPMI manufacturing came in better than expected, and European stocksrallied intraday before declining again. Meanwhile, Europeanleaders are seeking additional help from around the world after EUofficials boosted the European firewall capacity.

JPN225 (Nikkei)

Technical : Daily studies arefinally starting to ease from aggressively 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 further unwind from these overextendedreadings. Look for a pullback towards the 9,500 area beforeconsidering possibility of a bullish resumption. A break below9,900 will confirm and accelerate declines.

Fundamental: Gains here have stalled out as concerns of a strengthening Yen have reduced the outlook of exporters. Bank of Japan governor Shirakawa faces pressure from notable exporters to lower the worth of the Yen even further, while traders are expecting a further strengthening of the yen. A gauge of manufacturing confidence today came in unchanged from last month’s figure as executives predicted that the yen will rebound against the dollar.

AUS 200 (ASX)

Technical : The market remainslocked in a multi-week consolidation dating back to 2011 with anyrallies very well offered into the 4,400 area. As such, we expectthe range-bound trade to continue and once again look for therecent rallies to stall in favor of a bearish resumption back intothe 4,100’s at a minimum over the coming days. A bearishoutside day formation on Monday helps to confirm bias.

Fundamental: Aussie stocks declinedas after rising over the past few sessions. Signs of slowing growthin Chine and a cut recommendation on raw materials from GoldmanSachs were thought to be contributing to decreased marketoptimism.

--- 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/2012/04/02/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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