European Trade: Following the negative momentum seen
over the last few days of trading, the European markets started
declining from the first few minutes of trade, with most of the major
European indexes down almost 1%, while the S&P futures are trading
just above a three months old support trend-line.
Every major
equity market moved lower in early Wednesday trade, with the Irish
Overall index down 3.3% in the first few hours of trade. The
heavyweights, German Dax and the U.K. FTSE lost about 0.75% as the vast
majority of companies declined. The Eastern European markets also
declined in Wednesday trade, extending the sell-off seen over the prior
two days of trading.
The selling in the global equity market
comes as market participants consider the current rally as having
outpaced, by a large margin, the prospects of the global economy to
stage a dramatic continuation of growth. Since the lows touched in
March, the global equity markets have surged close to 60%, making this
rally one of the strongest on record, in a time when the global economy
is barely moving.
S&P Technical View: TheLFB Member Charts
4 Hour chart trend: Short. Main price points: 101.50, 1062.50, and 1098. Looking for: Move lower
S&P
futures are still trading lower with the latest break going through the
1062.50 resistance area, which is confirming that the U.S. dollar
bottom, and equity top, are temporary placed.
The wave count of
an expanding diagonal in wave 5 or C that we have been monitoring for a
few weeks now was completed at the 1098.50 top, which needs to hold if
a bear market move can easily happen. As such, we will be looking for
an impulse structure towards the 1011.50 area
Sector Moves: The
automobile & parts together with the basic materials sector were
the biggest drag on the European markets in Wednesday trade, both
declining more than 2%. Important declines also came from the
construction & materials sector, on the back of declines seen in
the French companies Vinci and Saint Gobain. In particular, Saint
Gobain shed 3.30% in Wednesday trade.
The German Dax is heading
lower for the fourth consecutive day on Wednesday, lead by Infineon,
which plunged 8% after rumors emerged that the company lost an
important contract. Also in the German Dax, Daimler, the maker of the
luxury brand Mercedes, plunged 3% as it reported a drop of 80% in its
third quarter income.
