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

mercoledì 9 maggio 2012

Market Comment - May 9

(Marco Bonelli) The good, the bad and the ugly!

Is it good that the market closed well off the daily lows (one of CNBC's favorite drumbeat lyrics) or is it bad that the market closed down a fifth consecutive day?

Which signal does the rebound send when the market is down again the next morning? - Mechanical trading to play some chart levels or buying the dips?


Which signal do plummeting commodity prices send? - Pure reverse-currency play, concerns about the anticipated weaker demand as a result of a weak global economy or disappearance of any hopes for another QE operation? This is interesting because re-discovered uncertainties kind of scream for more central bank intervention and if it's not for QE, shouldn't precious metals like gold and silver trade higher instead falling to new yearly lows?

Which signal does the rising Dollar send? - Flight to safety or the belief that fundamentals are better in the US than in Europe?
(The argument of interest rate spreads became a bit foggy as yields in the US fall even faster than in Europe.) After breaking below support of a triangle formation end of April, the DXY is back on track, trading above 80, breaking resistance of the triangle formation and confirming levels above its 50day and 100day MA.

Many questions and no clear answers probably describe current markets the best. A few contradicting signals (higher NFIB (small business) sentiment for April and better industrial production, orders and exports from Germany for instance keep the word "recovery" in play against weaker fundamental data almost everywhere else) even add to the confusion but unfortunately investors almost entirely focus on the European situation, which includes blaming everything on the related uncertainty and forgetting about the global deterioration of fundamentals, with or without the reignited worries about the European crisis.

Back to the charts: The Dow Jones held 12876 and 12754; the SPX broke 1370.50 but held 1356.50; the Russell 2000 held 783.50; at the same time, the VGY closed right at 351.50; the Nasdaq Composite closed right at 2946 support and the NDX at 2629 support. In summary, most support levels got broken intraday but at the end of the day some critical levels held. This morning many levels will again be broken, which doesn't improve the technical picture. If I had to pick one, I would choose the 350 level in the Value Line Index as one of the most important marks. A break would conclude a head-and-shoulder formation and would push the index back into the August - December trading range from last year.

In a desperate search for a guideline, CSCO's earnings call tonight will likely determine the next direction of the technology sector and the Nasdaq.

With that let's conclude with a great quote from former UK prime minister Margaret Thatcher: "The problem with Socialism is that one day you run out of other people's money".

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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