Yesterday's Notable Technical Developments
It's very simple: Out of risk and into safety!
Very simple: Out of risk and into safety! It's been a recurring theme, but just in case you didn't get the message, the markets thumped you upside the head with it. Scary possibilities about financial contagions from overseas have caused global investors and traders alike to completely abandon anything that isn't 100% safe (kind of). At the moment, the safest assets seem to be those backed by printing presses and governments willing to use them. This has led to a flight from euro exposure and increased demand for the dollar and yen.
A quick scan of the major asset classes by proxy (TLT, S&P futures, DBC, and UUP) illustrates the rotation in recent days…
…while this 130-minute chart shows the trends taking shape over recent weeks and months.
Asian markets followed the US lower to the tune of 2%-3% losses and European markets are suffering again, down 1%-2% as of 8 a.m. EST. More dollar strength overnight and early this morning versus the euro and yen has the US dollar index (DXY) higher and very near my target of 80.50. This is putting more downward pressure on gold prices (lower by 0.75% as of writing), while oil remains flat for now. The benchmark 10-year US Treasury is firmer ahead of the 8:30 a.m. employment report, yielding 3.57%. Yield support remains at 3.55% and may be put to the test today. While the employment report has the potential to be a real game-changer, one thing we can expect is more volatility today as uncertainty is the market's nemesis -- especially on a Friday!
Market internals: NYSE
(Figures are rounded)
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter