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 finally roll over; deeper setbacks ahead
  • 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: Yesterday’soptimistic Fed report quashed hopes of a third round ofquantitative easing and sent US stocks lower. The Fed saw the improvingeconomy reducing the need for new stimulus, even as the centralbank officially sticks to a plan to hold the benchmark interestrate near zero , at least through 2014.Meanwhile, US stock futures declined as demand at a Spanish bondauction dropped.

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 that the UK services sector unexpectedly expanded in March failed to offset today’s overall negative risk appetite, as UK stock fell sharply to erase the most recent gains. Meanwhile, an index of UK house prices surged to its largest gain in three years as first time owners rushed to buy before the upcoming expiration of a tax holiday on some home purchases.

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: European stocksdeclined today despite positive PMIs out of the services sector.Today’s ECB rate decision remains in the spotlight as marketsdigest the central bank’s economic assessment. Meanwhile,German factory orders increased less than economists forecast inFebruary , as demand from non-Eurocountries barely offset a drop inEuropean demand, the German stats bureau reported today.

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 remain tilted to the downside sothat technical studies can further unwind. Look for a pullbacktowards the 9,500 area before considering possibility of a bullishresumption.

Fundamental: Japanese markets retreated significantly today with the Nikkei dropping the most in 5 months and closing below 10,000 for the first time since March 13. Yesterday’s Fed signal, that there would be no more easing, was thought to be influencing sentiment here.

AUS 200 (ASX)

Technical : The market remainslocked in a multi-week consolidation dating back to 2011, with anyrallies very well offered into the 4,300’s. As such, weexpect the range-bound trade to continue and once again look forthe recent rallies to stall in favor of a bearish resumption backinto the 4,100’s at a minimum over the coming days. A bearishoutside day formation on Monday has helped to confirmbias.

Fundamental: A ustralia today u nexpectedly posted itssecond consecutive trade deficit as coal and metal exports slumped.The development weakened the Australian dollar and intensifiedpressure on the Australian central bank to encourage growth bycutting rates at its next meeting.

--- 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/2012/04/04/Global_Equity_Monitor.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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