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 20 marzo 2012

Market Comment - March 20

(Marco Bonelli) And the winner is....

Bond yields rose for 9 consecutive trading days. The Dow Jones and BKX were up 8 of the last 9 trading days and the Nasdaq Composite was up 7 of the last 9 trading days, all since stocks experienced their one and only meaningful sell-off two weeks ago on March 6th.

Financials and technology were the leading industry sectors, sometimes joined by energy and basic materials, the sector that grabs headlines this morning following some more comments about deteriorating demand out of China.

In the past few weeks, financials showed some of the most interesting chart-pictures after the BKX, XBD and other sub-sector indexes broke out of a double-bottom formation. Yesterday, the BKX came 1.28 points (or 2.5%) close to the downtrend from 2010 (at 52) and also reached its calculated target resulting from the double-bottom pattern (the XBD and other financial related indexes still have some room to go until they reach their theoretical target). So did the sector exhaust its potential or did investors just get a taste of more to come?

Technology continues to ride the AAPL wave and so far mostly ignored early earnings pre-announcements from the semiconductor and telecom equipment space. DELL disappointed a few weeks ago as well as ADBE last night (with ORCL reporting tonight, investors will get another look at the software space). Based on forward-looking optimism, most sub-sectors reached the highs from February or the highs from spring/summer last year. What's next? Did the sector exhaust its potential or will The New iPad, iPhone5, iTV and Windows 8 - euphoria push everything further?

Also to mention are cyclicals and industrials that showed considerable weakness beginning of the months and even violated some up-trends from the October lows but got another boost from asset-allocation shifts out of bonds amid another boost of confidence towards the economic recovery scenario. Also here, almost all sub-sectors either reached the highs from February or the highs from almost a year ago. Did the sector exhaust its potential or will strong economic numbers and housing related data support more to come?

As I highlighted the winners of the last 9 trading days, market breadth was not part of that group: the advance/decline ratio recorded a healthy level only 3 of these 9 days, the rest of the time, particularly last week, market breadth fell back into the weak camp, which obviously is not a strong sign. This and maybe the performance of the broad Value Line Index needs to be watched: the index developed a rising wedge pattern, already pulled back from the top-line beginning of the month, rebounded and reached the resistance line (374.60) again yesterday but reversed to the downside in the last 60 minutes and opened almost 1% lower this morning, waiting for the next catalyst!

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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