Greg Secker – Global Market Update

Yesterday, notes Mr Secker, the FTSE 100 closed down 105 points at 4,190. An interesting and ironic day after the 100 point rally was saw yesterday. We are watching the support level of 4,000 and resistance at 4400 closely now to see which one is breeched. The Dow opened yesterday with early weakness as the index got a clean break through 8,300 and dropped to 8,140 before closing the day with a big loss of 226 points. The 8,400 resistance level clearly turned the index lower, making another test at 8,000 possible. The Dow was testing the 8,400 level yesterday which is a level that had been razor sharp support throughout December. The market was clearly watching this level and pounced when 8,400 couldn’t be crossed. Continued weakness will likely be seen ahead, likely toward the 8,000 level for another critical test. In the medium and longer term note the Dow continues to build out the large triangle pattern from the Daily Chart. The lower high that has formed at 8,400 could provide the fuel needed for a potential downside break from the triangle. Watch the lower trend line closely. Today there is no major news on GBP. At 13.30 GMT the Canadian GDP is due for release. This is the change in value of all goods and services produced by the economy. The forecast if for a fall of 0.5%. If the actual figure is greater than the forecast then this is good for the economy. Also at 13.30 the US advance Quarterly GDP figure are due for release. If the actual is greater than the forecast then this is good for the currency. This data is released 30 days after the Quarter ends. Have a good weekend.

Yesterday, notes Mr Secker, the FTSE 100 rallied 100 points to close at 4,295. The index is now resting on the 50ema so today will be a very interesting day because in the last few months the index has found resistance at the 50 ema. If this level is breeched then we could see a re-test of the double bottom neck-line level at 4,660 but if the 50 holds thenwe could see heavy falls. The Mining sector may drag the FTSE down today because of news releases. Yesterday, notes Mr Secker, the Dow opened the day with early strength as the index smashed through resistance at 8,250 and rallied up to 8,400. At the close the index pulled back from the day’s highs, but still closed the day with a healthy gain of 201 points. We are watching 8,400 closely today as a failure at this level could spark a nice drop back toward the 8,000 level. Conversely, strength above this zone could mean uninterrupted strength back toward the 9,000 level. The NASDAQ and S&P each rallied nicely out of their respective ranges. Keep an eye on today’s highs for continued strength. Today on the Forex news releases we are expecting the US Durable Goods orders and Unemployment Claims at 13.30 GMT. The Durable Goods figure is the change in total value of new purchase orders placed with the manufacturing sector, and if the actual is greater than the forecast then this is good for the currency. The Unemployment Claims is the number of people who filed for unemployment insurance for the first time. This figure is usually watched with great interest because it provides an accurate and up-to-date representation of the unemployment situation. There are no major news releases on GBP or EUR today. Good Trading.

The FTSE 100 closed down 14 points at 4194 yesterday as construction materials company Wolseley fell 10% and 3I Group lost 5% of its share price. The index continues in a large consolidation between 3800 and 4600 and is likely to persist in its primary down trend in the medium to long term. Looking at US Stocks the S & P 500 rose 9 points to close at 845, and the Nasdaq closed up 15 points at 1054, up for a third straight day as a rare bit of encouraging news on the earnings front offset fresh signs that consumers remain glum. The Dow had its second straight moderate advance finally closing up 58 points at 8174. The rise came after companies including United States Steel Corp. and American Express Co. managed to post profits in a difficult recession. Financial stocks that were mostly higher also lent support to the market. Speculations indicated that a reversal of the Dow below 8000 would indicate a test of the 2002 low of 7300 and in the long term, penetration of the 2002 low of 7300 would offer a long-term target of 6000. In the Forex markets today all eyes are on the US FOMC interest rate decision where rates are expected to hold at 0.25% and may impact EUR/USD in particular if there are any surprises. For those of you trading into the evening on NZD please be aware that the New Zealand Trade Balance is due out at 21.45. Trade balance is the difference between important and exported goods during the last month. The forecast is for a drop of 100M and should the actual be greater than the forecast then this is good for the currency.

Yesterday, notes Mr Secker, the FTSE100 closed up 156 points at 4,209. This was the first time this year that we saw 2 successive green bars on the daily chart. The low test bar on Friday tested the 4,000 and today we see that it was rejected. This may signal that the lows at 3,700 may not be re-tested as the index rallies to test the neckline of the double bottom. The Dow opened the day yesterday with clear strength as the index rallied from 8,000 to 8,225 before failing. The index then dropped back to 8,000 before bouncing to the Close, ending the day with a gain of 38 points. Today on the Forex news we see the German IFO Business Climate news release at 09:00GMT. This release is composite index based on surveyed manufacturers, builders, retailers and wholesalers. IF the actual is greater than the forecast then this is good for the currency. Then at 11.00 our CBI Realised Sales are going to be released. The forecast is for a fall of 53. This is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. Then at 15:00 GMT the US Consumer Confidence is going to be released. The forecast is for a reduction of 38.7. If the actual figure is greater than the forecast then this is good for the currency.

On Friday the FTSE closed up 0.2 points, at 4,057 having pierced through the 4,000 mark for the first time since early December. The UK benchmark is down over 8 percent so far this month, its worst annual drop since its launch in 1984. After a very volatile session of trading the major US equity indices pared opening losses to close mixed as investors struggled to weigh mixed results from the likes of General Electric and Google. The Dow closed 0.6% lower at 8,078. The Dow opened the day with early weakness as the index dropped back to the 7,900 support level before rallying back to 8,150. The index eventually pulled back from intraday resistance and closed the day with a loss of 45 points. The Dow continues to wind up within the large 7-day trading range. As we mentioned last week the Dow is likely to continue to build out within this range until a clear and decisive direction is determined. Watch the upper line of the range at 8,200 for signs of strength and watch 7,900 for another big test at near-term support. Today the major news release is the US Home Sales at 15.00 GMT. The pound took a hammering on the back of the news on Friday. Once again the sterling suffered the biggest losses of the major currencies last week. GBP USD plummeted from over 1.49 to below 1.37. EUR-GBP rose accordingly from 0.89 to 0.945. The Government’s announcement of a new rescue package for British banks put the pound under pressure. The EUR pushed down to a low of 1.2765 before recovering slightly to 1.2972. However, it continues to threaten the major support at around 1.26. There is no major news due today. The Swiss franc weakened further against the USD as the reserve currency continues to reap the benefits from safe haven flows, and is likely to hold its bearish trend against the greenback as risk sentiment continues to drive price action in the Forex market.

The FTSE 100 gave up early gains yesterday to close at 4052 losing 7 points with the only element of joy coming that it held up over the 4,000 mark yet again. Generally US stocks fell amid a mix of weak economic data and disappointing earnings news.  The Dow pushed aside yesterday’s optimism and dropped 105 points closing at 8122.  The index opened the day with early selling pressure and dropped sharply from 8,250 back to the 7,950 zone, as seen in the 15 Minute Chart. The index got another successful test of the 8,000 level and rallied back to 8,200 before ending the day with a loss of 105 points. While Initial jobless claims caused the broader the S&P 500 index to fall 12.74 points to 827.50. The UK is expected to release its figures for GDP and Retail Sales at 9:30GMT which should guide the movement of the pair drastically. The euro drifted down slightly against the US dollar with little influential economic data to lead the market. French consumer spending contracted than anticipated, as a rise in unemployment contributed to the decline. Consumer spending which counts for 15% of the economy helped France dodge a recession in third quarter, but will not contribute to the same outcome as the economy is expected to contract by 1.1% in the fourth quarter. Industrial Orders within Euro-zone continued to depreciate reflecting a rapid contraction within manufacturing sector, which could spill into more problems for the region as a whole. The devaluation of the Ruble by Russian Central Bank could favor the euro, as Russia will be net buyer of the currency. The expectations for both the GDP and the retails sales numbers are expected to show a decline.  The UK is expected to receive its worst output figures since 1990 – and official confirmation the country is in a recession. Trade long with great care today, and enjoy your weekend.

The FTSE closed down 31 points yesterday at 4,060 and tested the key level of 4,000. A nice down-trending resistance level has formed from the highs of the 6th January and it will be interesting to see if this resistance holds during the interaction with 4,000. The Dow opened the session with early strength but dropped from the 8,100 level and tested the lows at 7,940 which were reached yesterday afternoon. The index successfully tested these lows and embarked on a very bullish 300 points rally and eventually closed the day with a gain of 279 points. Today watch for a test of 8,350 for signs of resistance. A break above this level will lead to more strength ahead. Continue to watch 8,000 for additional tests. Today on the Forex the Canadian monthly core retail sales. The forecast is for a 1.5% reduction. It is the change in total value of retail sales (excluding automobiles). At 13:30 the US Building Permits and Unemployment Claims are due for release. These are both important figures and have a tendency to move the markets. The forecast for Building Permits is a slight reduction, down from 620,000 to 600,000. These annualised number of new residential permits issued during the previous month. If the actual is greater than the forecast then it’s good for the currency. The unemployment figure is the number of individuals who filed for unemployment insurance for the first time in the last week. If the actual is lower than the forecast then this is good for the currency. Anyone trading the Canadian Dollar may be interested in knowing that at 15:30 the Bank of Canada Monetary Policy Report is due to be released then at 16:25 the Governor of the Bank of Canada is due to make a speech.

Yesterday, notes Mr Secker, the FTSE 100 closed down 17 points at 4,091 following an interesting news-led day with Barak Obama being inaugurated as the 44th US President. A high test bar has formed on the daily chart as the index moves slowly down towards the 4,000 level. We will watch with interest over the coming to see if the new President can inject some optimism into the US markets – the effect of sentiment on the Markets can sometimes be difficult to gauge. The Dow opened the day with an early drop through the bottom of the three-day consolidation and quickly tested the 8,100 level. The index remained beneath 8,200 throughout the day and eventually sold off to the Close ending the day beneath 8,000 with a loss of 332 points. We can see that the Dow is once again testing the key 8,000 support level. Furthermore, the Dow is breaking the lower trend line of a large ascending triangle that has been developing since October and this break could lead to much bigger selling pressure in the weeks ahead. Continue to watch 8,000 as a very major level, as the index may continue to test this zone before decisive action is taken away from this level. Today on the Forex news we have the MPC Meeting Minutes released at 09:30. These releases can sometimes affect the markets if the details of the meeting raise eyebrows and provide a possible indication as to future meetings. For those of you trading late into the evening please be aware that the Japanese Trade Balance is going to be released at 23.50. This is a major release for the Asian session and is the difference between the value of imported and exported goods during the previous month. If the actual is greater than the forecast than this is good for the currency. Good trading.

Yesterday, notes Mr Secker, the FTSE closed down 38 points at 4,108. The index gapped up 70 points on the open and continued to rally gaining 100 points by mid-morning. Then the sellers gained control and the index fell nearly 200 points during the afternoon before eventually closing down only 38 points. This was a very interesting days trading considering that the US markets were closed because of the public holiday – Martin Luther King Day. Today we see Barak Obama inaugurated into the WhiteHouse and will be watching the US Markets closely to see how they react today and over the coming weeks. On the Forex news we see a wide range of news releases across many currencies – please trade with care today. At 09.30 our year-on-year CPI is due for release. The forecast is for a 0.6% drop from 2.0% to 1.4%. Watch for a possible movement to the up side in the GBP if the actual is greater than the forecast. This figure is considered the UK’s most important inflation data figure because it’s used as the Bank of England’s inflation target, and consumer prices account for a majority of overall inflation. At 10.00 the German Economic statement is due to be released. This is a survey of 350 institutional investors and analysts to determine economic outlook for the next 6 months, and we are expecting a slight increase from -45.2 to -43.5. Watch the EUR should the result be different. Then at 13.30 the Bank of Canada will be releasing the rate statement, and also the overnight lending rate. A forecasted drop of 0.5% is expected – down from 1.5% to 1.0%. This is released 8 times a year and if the actual is greater than the forecast then this is good for the currency. Those of you trading into the evening may be interesting in knowing that the New Zealand monthly Core Retail Sales and monthly Retail sales will be announced at 21.45. Good trading.

The FTSE closed on Friday down 41 points at 4,127, a fall of nearly 300 points for the week. A rally in the morning session stalled around lunchtime as the New York markets opened forming a high-test bar on the daily chart. High test bars on any chart (stock, currency, sector or indices) are bearish signals. This means that a fall down to 4,000 may not be as quick as initially thought. The Dow opened the day with early strength and tested short-term resistance at 8,300. The index failed to push higher and dropped back before rallying into the Close, eventually ending the day with a gain of 69 points. If the Dow remains above 8,000, we could see another move back up within the range toward the 8,500 to 8,600 level, if not higher. Watch 8,350 for early strength. Today is a relatively quiet day on the Forex news. It’s a Bank Holiday in the US today so there are no major news releases to be aware of to affect the USD. At 08:15 GMT the Swiss year-on-year retail sales will be released, and at 13.30 the Canadian Foreign Securities Purchases will be released. Both of these have a medium weighting so should not cause major moves on either currency, but with the US markets closed today may cause more of an effect than normal. Those of you planning on trading into the evening may be interested in the New Zealand quarterly CPI at 21.45. The forecast is for a 0.4% reduction, and if the actual is greater than the forecast then this is good for the currency.