Posted at Live Trading News on February 21, 2012
Investors in ASEAN are watching Europe closely as a meeting of finance meetings appears to be close to announcing a second bailout package for Greece. Greece said it was confident a deal would be found to seal the country’s euro zone future with a new bailout, but key partners demanded strict surveillance of the Athens government.
And Watching might be the best thing to do today.
Dangerous Waters this week as the so-called “Greece Deal” gets put to the test combined with the rapid escalation of tension in the Middle East, this week is a good week to be watching.
The CBOE Volatility index (The VIX), as pointed out by Paul Ebeling is down 7.5% Friday and has been below the key 25 level for more than two months, suggesting investors are less worried about the market’s outlook, a shift in that sentiment may bite into the rally this week.
Earnings are due from retailers, including Wal-Mart (NYSE:WMT) and Home Depot (NYSE:HD). The week is one of the last big ones of the earnings period.
With results in already from 404 S&P 500 companies, there will be lot of focus on the outlook for Europe and the U.S. economy. Data on existing- and new-home sales is expected this week.
As Warren Buffet once said, “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.” this is good advice for the coming trading sessions.
Given we are already at an elevated level any bad news on Greece or an overt act of aggression in the Middle East may see a sharp sell off, the time to be looking to buy is on that sell off.
The US market’s recent rally has placed it at the crossroads of key technical levels that HCM believe are enough to make investors sit back and wait.The percentage of New York Stock Exchange stocks trading above their 50-day moving averages is in the 85 percent to 90 percent range, this generally is justification for a pull back and some consolidation.
The index ended Friday at 1,361, its highest since May 2011. A break above 1,370 would put the S&P 500 at its highest since June 2008.The Dow is now at a key psychological level 13,000, while the Nasdaq is nearing the 3,000 level.
As the Dow Chart shows, the market is looking to test 13,000 but may return to 12800 or lower shortly after that to consolidate.
HCM Custom Chart has been built to reflect the trigger points for High Frequency and Other Electronic Trading Methods
Singapore Stands out in the Emerging Markets, Solid GDP and Economic Surplus Data combined with an undervalued dollar make it very attractive on a sell off.
Noble Foods, Olam and Sembcorp Marine are value should the market fall over 2%.
United States
US markets were closed for the Presidents’ Day public holiday.
Europe
Euro markets rose on hopes that Greece will finally secure a massive but long-delayed international bailout, allowing the debt-crippled country to avoid defaulting on its debts next month.
Key numbers:
•London’s FTSE 100 added 0.7% at 5945.25
•In Paris, the CAC 40 added 1.0% to 3472.54
•In Frankfurt, the DAX added 1.5% to 6948.25
Asia
Asian stocks rose, extending the longest streak of weekly gains on the region’s benchmark since 2005, after China cut banks’ reserve requirements to fuel lending and buoy growth, boosting demand for riskier assets.
Key numbers:
•MSCI Asia Pacific Index added 0.8% to 128
•Japan’s Nikkei added 1.08% to 9485.09
•Hong Kong’s Hang Seng lost 0.31% to 21424.79
•China’s Shanghai composite added 0.27% to 2363.6
Commodities
Energy
Oil prices have hit nine-month highs after Iran halted sales to France and Britain, and as China eased credit policy amid expectations of a bailout deal for Greece, analysts say.
•The Brent and New York contracts reached $US121.15 and $US105.44 a barrel in early trading on Monday – the highest levels since May 5, 2011.
•In late London deals, Brent North Sea crude for delivery in April stood at $US120.14 a barrel, up 56 cents compared with Friday’s closing level
•New York’s main contract, West Texas Intermediate light sweet crude for March, jumped $US1.84 to $US105.08
Precious metals
Spot gold was higher in Europe on Monday, buoyed by news of a Chinese reserve ratio rate cut and optimism over Greece, although analysts expect prices to remain relatively rangebound while US market players celebrate a public holiday.
•Spot gold was 0.3 per cent higher at $US1,728.94 a troy ounce, while spot silver was up 0.5 per cent at $US33.381/oz.
•In other precious metals Monday, spot platinum was up 0.9 per cent at $US1,642.50/oz and spot palladium was 1.2 per cent higher at $US689.83/oz.
Base metals
Base metals have closed higher on the London Metal Exchange, benefiting from fresh monetary easing in China, optimism over the outlook for Greece and an upbeat assessment on the German economy.
•LME three-month copper ended the PM kerb session at $US8,235.50 a metric ton. It was up 0.8 per cent on Friday’s PM kerb close.
Shayne Heffernan
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com
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