Archive - Feb 5, 2010

We have speculated that the Federal Reserve or the U.S. Treasury could be allowing a "buyer" to accumulate stock index futures to boost stock prices. Perhaps the "buyer" has stopped buying. We know that the S&P 500 has dropped 6.6% since the close on January 20, the day before President Obama announced a plan to restrict proprietary trading by banks. Moreover, the S&P 500 fell on seven of those 11 trading days.

We saw almost to the tick the downside targets mentioned last night in S&P futures and EURUSD as per the hourly and 3-hour charts. However we see more downside potential on the Dax as we have not yet reached the target at 5,396. Also we do not have much hourly divergence in S&P and EURUSD's RSI low coincides with the lows which would suggest we can push a bit lower while remaining in the downtrend channel. S&P futures should bounce (maybe as high as 1070 here) but a break of 1051 on the downside could take us to 1,038.50 as the last leg started yesterday seems to be missing a 5th wave lower (caveat is that catching wave 5 of 5 is a tricky game as it can sometimes be so protracted you hardly see it on a chart!). - Nic Lenoir, ICAP

• Asian stocks fall most in 10 weeks on US jobless claims.
• Australian central bank raises outlook, sees 3.25%-3.5% growth ahead.
• Bank of England voted against extending its bond buying program.
• China announces anti-dumping steps on US chicken amid trade disputes.
• China's stocks drop for 3rd week on global recovery concern.
• Gold saw its biggest slide in 16 months, joining other metals in a broad sell-off.
• Hong Kong stocks fall, headed for longest run of weekly losses since 2008.

RANsquawk 5th February Morning Briefing - Stocks, Bonds, FX etc.

Bloomberg has an excellent interactive analysis on the potential for a near one million count revision upwards of the unemployment numbers. This combined with the work my team and I have put together should lead subscribers to believe that medium term, unemployment can (and probably will) exacerbate the global equity market decline.

7 technical profiles / daily charts of the S&P 500 Futures (ES), DJIA Futures (YM), NASDAQ-100 Futures (NQ), VIX (CBOE Volatility Index), US Bank Index (BKX), Gold Futures (GC) & Silver Futures (SI). Get your TA on & start mapping out a strategy / plan of attack for Friday's trading session.

RANsquawk 5th February Morning Briefing - Stocks, Bonds, FX etc.

Consensus is expecting US payrolls to rise by 15,000 in January. I wouldn't be surprised if the actual print comes in at ten times that amount...

The five pics below (5-minute, daily & weekly) illustrate [1] a near perfect, positive correlation (R-squared ~ 1) between Gold Futures (GC), Silver Futures (SI) and Crude Oil Futures (CL), [2] a nearly perfect, inverse correlation between precious metals & the US Dollar Index (DXY), and [3] an interesting relationship between the S&P 500 (INX) & the VIX (CBOE Volatility Index). (1) 5-minute Gold Futures (GC) v. Silver Futures (SI), (2) 5-minute Gold Futures (GC) v. Crude Oil Futures (CL), (3) 5-minute Gold Futures (GC) v. US Dollar Index (DXY), (4) daily S&P 500 Cash (INX) v. VIX (CBOE Volatility Index) daily chart & (5) Weekly S&P 500 Cash (INX) v. VIX