Press review - page 140
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The NASDAQ as you can see tried to rally during the course of the week, but found far too much in the way of resistance just below the 4200 level to continue. With that, the market pullback to form a shooting star now we find ourselves with a very sign just above a significant bottom in the market. With this, we feel that the next couple of weeks could be vital to the NASDAQ, and show where the next moves heading towards.
If the NASDAQ does in fact break down from here and below the hammer from the previous week, we feel this market could come undone at that point. Granted, it has been a nice there step type of action higher, but we have to recognize that we have broken down below a trend line that is positive, and have retested it from the bottom. We failed, and as a result the NASDAQ suddenly looks like it could be a bit vulnerable.
On that move, we believe that the market will probably look for 3600 at first, but possibly 3300 as well. With that, we feel that the move could be fairly sudden though, and it really comes down to whether or not we get the right headline to push the market over the cliff so to speak. On the other hand, if we break the top of the shooting star which is roughly 4200, that would be an extraordinarily bullish sign, and have the market going much higher. A break above the 4350 level of course would be a fresh, new high, and the markets would of course take off to the upside at that point in time.
We don’t necessarily think the markets ready to break down quite yet, but we have to bring that to your attention as it is a potentially market moving event. The next candle or two would be very important, and as a result we will be paying quite a bit of attention to this market. On another note, if the NASDAQ moves drastically, it will be a sign of risk appetite. That could send all stock markets in the same direction.
The MIB as you can see initially tried to rally during the week, but found the 22,000 level to be far too resistive. Because of this, the market pullback to form a shooting star, and it appears that we will be looking to find support below. With that, the market is still in a very strong uptrend though, so we are not interested in selling this market under any circumstances. We are simply going to wait on the sidelines for a supportive candle so that we can start buying again.
The Parisian index tried to rally during the week, but as you can see found enough resistance of €4500 level to turn things back around. Unfortunately, we ended up forming a shooting star, instead of breaking through like we would have preferred. Nonetheless, the market of course still look bullish overall but the fact that we formed a shooting star does suggest to us that possibly we may be getting ready to pull back a bit. At the end of the day, we believe that this pullback may be one of those times where the bullish longer-term traders may be a lot of pick out a bit more in the way of a position size as it certainly should concede value down in this general area.
Currently, we have been in an uptrend the channel and there is nothing on this chart to suggest that the channel is done. With that, we believe that a pullback all the way down to the 4350 level is possible, and as a result we think that there will certainly be some value in that area. On top of the idea of the channel is the fact that the area has offered support and resistance over the last several months, so quite frankly appears that there is quite a bit of interest in general.
The market looks as if it’s ready to continue going higher after a little bit of a pullback in if you look at the channel itself, it just seems that we been shopping around with the general upward bias. Because of this, we believe that the CAC is a longer-term buy-and-hold type of situation, not something you should be looking for quick returns in. That’s okay, because quite frankly that is a much healthier sign then suddenly gains. The shows that people were methodically stepping back into the marketplace, and that they believe in the long-term validity of the uptrend that we are presently in. With all that, there is absolutely no reason that we can see on this chart to consider selling this market.
The IBEX tried to rally during the week, but as you can see found enough trouble just above the €10,500 level to pull things back down and form a shooting star. The shooting star suggests that the market could pull back from here overall, and as a result we are on the sidelines. We are actually looking for support somewhere near the €10,000 level, and if we get the right supportive candle, we are more than willing to buy this market. We would also do the same if we break the top of the shooting star from this past week as it would show a significant break up momentum.
For the second week in a row, the EUR/USD pair fell, but bounced enough to form a small hammer. With that being the case, we believe that this market will continue to grind sideways, and as a result this market looks as if it is not ready to do anything at the moment. Because of this, we are not interested in a longer-term trade in the EUR/USD pair, but do recognize that there is a potential uptrend line coming soon, so buying is possible, but not at this moment in time.
The NZD/USD pair went back and forth during the course of the week, but eventually changed very little. The market looks as if it’s still well supported at the 0.85 handle, and as a result we feel that this market will more than likely find buyers in the general vicinity. Going forward, we fully anticipate that this market will try to get to the 0.90 handle, and we do not have the right supportive candle to get involved. However, if we break down below the 0.85 handle, we think this market will more than likely head to the 0.83 level.
The USD/CAD pair continue to go higher during the week, but as you can see didn’t have much of a range. At this moment time, we believe that this market will continue to the 1.13 level, but it may take it’s time to get there. With that being the case, we feel that this market can only be bought, and as far as selling is concerned it’s almost impossible based upon the supportive hammer from two weeks ago. If we can get above the 1.13 level, we feel that the market goes to the 1.15 over time.
The USD/JPY pair fell during the course of the week, but as you can see had a very small trading range. Because of this, we feel that this market is still stuck in the consolidation area, and as a result we really don’t have much of an opinion at the moment. However, you can see that there is an uptrend line that we are approaching, therefore we are looking for a supportive candle in order to start buying as we think the market will continue to try and reach the 103 level, followed by the 105 level given enough time. Selling is not an option.
The dollar ended the week lower against the safe haven yen and Swiss franc on Friday as fresh tensions over hostilities in eastern Ukraine underpinned safe haven demand.
USD/JPY touched one-week lows of 101.96 on Friday before settling at 102.18, ending the week down 0.48%. USD/CHF ended Friday’s session at 0.8814 after falling to lows of 0.8803 earlier and ended the week down 0.42%.
Concerns over the conflict between Russian and Ukraine escalated on Friday after U.S. Secretary of State John Kerry warned that Washington was ready to step up sanctions on Russia. The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.
The yen held gains despite data on Friday showing that Japanese inflation remained unchanged for a third successive month in April. The weak data fuelled expectations that the Bank of Japan will implement a fresh round of monetary stimulus this year, which would weigh on the yen.
Elsewhere, the euro was flat against the dollar on Friday, with EUR/USD settling at 1.3833. For the week, the pair rose 0.30%.
The euro’s gains were held in check after European Central Bank President Mario Draghi reiterated warnings on Thursday that the strong euro could trigger further monetary easing. He also said the ECB could launch a "broad-based" asset purchase program if the medium-term inflation outlook deteriorated.
In the U.S., data on Friday showed that consumer confidence rose to a nine-month high in April, adding to signs that the economy is improving.
The University of Michigan reported that its consumer sentiment index came in at 84.1 this month, up from 80 in March and the preliminary reading of 82.6. Analysts had expected the index to rise to 83.0.
In the week ahead, investors will be focusing on Friday’s U.S. jobs report for April and the outcome of the Federal Reserve’s two-day policy meeting on Wednesday. Wednesday preliminary April inflation report for the euro zone will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 28
- Japan is to release data on retail sales, the
government measure of consumer spending, which accounts for the majority
of overall economic activity.
- The U.S. is to release private sector data on pending home sales.
Tuesday, April 29- Markets in Japan are to remain closed for a holiday.
- New Zealand is to publish data on the trade balance, the difference in value between imports and exports.
- In
the euro zone, Germany is to release preliminary data on consumer price
inflation and a report by market research group Gfk on consumer
climate, while Spain is to release data on the unemployment rate.
- The
U.K. is to release preliminary data on first quarter gross domestic
product, the broadest indicator of economic activity and the leading
measure of the economy’s health.
- The U.S. is to a report compiled by the Conference Board on consumer confidence.
- Later Tuesday, Bank of Canada Governor Stephen Poloz is to speak; his comments will be closely watched.
Wednesday, April 30- New Zealand is to release data on building consents and business confidence.
- Japan
is to publish data on average cash earnings and industrial production.
At the same time, the Bank of Japan is to announce its benchmark
interest rate and publish its monetary policy statement, which outlines
economic conditions and the factors affecting the bank’s decision. The
announcement is to be followed by a press conference.
- In
the euro zone, Germany is to publish reports on retail sales and
unemployment change. Spain is to release preliminary data on first
quarter growth. The wider euro zone is to release preliminary data on
consumer price inflation.
- Switzerland is to publish its KOF economic barometer.
- Canada is to publish the monthly report on GDP growth.
- The
U.S. is to release preliminary data on first quarter GDP, as well as
the ADP report on private sector job creation, which leads the
government’s nonfarm payrolls report by two days. The U.S. is also to
release data on manufacturing activity in the Chicago region.
- Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement.
Thursday, May 1- Markets in China, the euro zone and Switzerland will remain closed for the Labor Day holiday.
- China is to release official data on manufacturing activity.
- The U.K. is also to produce a report on manufacturing activity, in addition to data on net lending.
- The
U.S. is to publish the weekly report on initial jobless claims. At the
same time, Fed Chair Janet Yellen is to speak at an event in Washington;
her comments will be closely watched.
- Later Thursday, the Institute of Supply Management is to release a report on manufacturing activity.
Friday, May 2The New Zealand regained ground against its U.S. counterpart on Friday but held near a three-week low struck in the previous session as traders continued to weigh uncertainty surrounding developments in Ukraine.
NZD/USD fell to 0.8547 on Thursday, the pair’s lowest since April 4, before subsequently consolidating at 0.8580 by close of trade on Friday, up 0.18% for the day but still 0.11% lower for the week.
The pair is likely to find support at 0.8531, the low from April 4 and resistance at 0.8636, the high from April 24.
Concerns over the conflict between Russian and Ukraine escalated on Friday after U.S. Secretary of State John Kerry warned that Washington was ready to step up economic sanctions against Russia.
Meanwhile, ratings agency Standard & Poor’s cut its rating on Russia on Friday, citing the potential for “additional significant outflows” of capital due to escalating hostilities with Ukraine.
The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.
Market players also continued to monitor U.S. data for further indications on the strength of the economy and the future course of monetary policy.
Data on Friday showed that consumer confidence rose to a nine-month high in April, adding to signs that the economy is improving.
The University of Michigan reported that its consumer sentiment index came in at 84.1 this month, up from 80 in March and the preliminary reading of 82.6. Analysts had expected the index to rise to 83.0.
Elsewhere, in New Zealand, the Reserve Bank raised interest rates by 0.25% earlier in the week and increased its growth estimate for the quarter ending in March.
In a widely expected move, the RBNZ raised its benchmark interest rate to 3.00% from 2.75%.
The central bank also said that gross domestic product is estimated to have grown 3.5% in the year to March, compared to the previous month's estimate of 3.3%.
Commenting on the decision, RBNZ Governor Graeme Wheeler said the strong kiwi is helping to contain inflation, though current levels may not be sustainable.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending April 22.
Net longs totaled 20,175 contracts as of last week, compared to net longs of 18,213 contracts in the previous week.
In the week ahead, investors will be looking ahead to Wednesday’s monetary policy announcement by the Federal Reserve amid speculation the central bank is likely to continue to scale back its stimulus program.
The U.S. will also release the monthly non-farm payrolls report for April later in the week as well as a preliminary estimate on first quarter economic growth.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 28
- The U.S. is to release private sector data on pending home sales.
Tuesday, April 29- New Zealand is to publish data on the trade balance, the difference in value between imports and exports.
- The U.S. is to a report compiled by the Conference Board on consumer confidence.
Wednesday, April 30- New Zealand is to release data on building consents and business confidence.
- The
U.S. is to release preliminary data on first quarter GDP, as well as
the ADP report on private sector job creation, which leads the
government’s nonfarm payrolls report by two days. The U.S. is also to
release data on manufacturing activity in the Chicago region.
- Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement.
Thursday, May 1- China is to release official data on manufacturing activity. The Asian nation is New Zealand’s second-biggest trade partner.
- The
U.S. is to publish the weekly report on initial jobless claims. At the
same time, Fed Chair Janet Yellen is to speak at an event in Washington;
her comments will be closely watched.
- Later Thursday, the Institute of Supply Management is to release a report on manufacturing activity.
Friday, May 2