Il Primo Ministro greco Lucas Papademos riceve l'approvazione del governo su tagli al bilancio che corrispondono al 7% del Pil nei prossimi tre anni e su una ristrutturazione finalizzata a ridurre di €100 mld gli oltre €200 mld di debito detenuto dai creditori privati, atteso il voto del parlamento • Standard & Poor's declassa il merito creditizio di 34 banche italiane tra cui UniCredit a BBB+ da A, Intesa Sanpaolo a BBB+ da A e Banca Monte dei Paschi di Siena a BBB da BBB+, S&P anticipa "una redditività decisamente debole per le banche italiane nei prossimi anni" • La produzione industriale italiana aumenta a dicembre +1,4% da novembre +0,3%, oltre le stime degli economisti +0,5%, anche se i dati del quarto trimestre -2,1% suggeriscono che la terza economia della zona euro è entrata nella seconda recessione dal 2009 • I Btp decennali salgono per la quinta settimana consecutiva, il periodo di recupero più lungo in oltre cinque anni, la prossima settimana il Tesoro vende €4 mld di buoni al 6% con scadenza 2014 • L'euro cala dal massimo di due mesi contro il dollaro, il mercato azionario europeo cala dal massimo di sei settimane e l'azionario Usa registra la prima settimana di perdite del 2012 dopo che i ministri delle finanze europee non hanno concesso il pacchetto di aiuto necessario a prevenire il collasso economico della Grecia

martedì 29 novembre 2011

Market Comment - November 29

(Marco Bonelli) Mind the gap, please!

This might be the most noteworthy message! Sure, retail sales soared on the Black Friday (estimated +6.6%)-Cyber Monday (estimated +18%)-wrap-around weekend and hopes remain for some progress in the mission to solve the European debt crisis, nevertheless, the never-ending gap-game in the Nasdaq and various other indicators suggest that yesterday's boring rally (the SPX traded in a 7-point range for five hours until some more volatility kicked in in the last 45 minutes of trading) may -once again - not last too long!

So what's up with the gap? Since beginning of August, the Nasdaq opened a trading session with a gap (that wasn't closed right away) 18 times and all but three gaps already got closed. There is still one gap open at the highs from earlier this month (which will eventually be closed, too) but the immediate attention goes to one gap from last week (Nasdaq Composite, 2567 - 2540 and NDX, 2251 - 2225.50, both from November 19), which the index attempted to close and the gap, that opened yesterday. So predicting the next market move solely following the "gap-theory", it might move a bit higher and close the gap from last week, followed by another pull-back to close the gap from yesterday...

Anyway, consumer and retail stocks underperformed the market yesterday (as did banks), credit markets (yields and CDS) in Europe don't agree with the move in equities and stubbornly remain deep in crisis territory, the Euro stays "surprisingly" low and close to the lows from beginning of October, the first economic data from this week (October New Home Sales and November Dallas Fed Manufacturing Index) was disappointing - all indicators that imply a short-covering rally running out of short-covering steam rather sooner than later. Beside that, a technical mega-rebound from over-sold levels usually doesn't start a new market trend, it's just a technical rebound that might close a gap, stay alive for end-of-the-month window-dressing efforts and fall back where it came from shortly after, especially if investors have difficulty to figure out why the market should be bought up (looking at the implosion of much-hyped IPOs like LNKD and GRPN, overall risk-appetite dramatically deteriorated in the past two weeks).

Sentiment is a tricky, almost non-existent phenomenon these days as the market remains extremely data and head-line driven. Recent market declines turned an overall positive sentiment into neutral but it seems like many market participants are no longer participating, stay sidelines or have simply given up for this year. The still active, neutral crowd flips back and forth and the resulting sentiment doesn't give any conclusions for possible contrarian trades. In other words, let's hang in there, mind the gap, watch some short-term chart-levels and wait for the labor data tomorrow and Friday. Any disappointment on that front and the Nasdaq will have another gap-opening while the index will revisit its August lows!

Trade well.

(Marco Bonelli is the Managing Director of International for CL King & Associates in New York. The opinions expressed are his own)

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