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daily report for 12/10/08

Discussion in 'Market Predictions and Reports' started by dojit, Dec 10, 2008.

  1. dojit

    dojit Private

    Nov 27, 2008
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    Market briefing

    Even though yesterday’s U.S session closed in negative territory, the current chart pattern on the S&P 500 still resembles an inverted head and shoulders- a pattern that often leads to a bullish rally. While Monday’s session started with a gap up in the markets and yesterday’s session closed above Monday’s high ( indicating that the bulls have not yet given up their fight), investors are still waiting for the neck line of the pattern to break – giving further confirmation. The major drag on the U.S market was the financial sector, as it plummeted yesterday by over 4%
    Despite recent confidence and rumors of a market bottom, investors are still buying up bonds, anticipating that 2009 is going to be one of the worst years in history. The buying frenzy increased yesterday to such an extent that one month bonds presented investors with a zero yield interest. Three month bonds didn’t differ much as the discount rate closed at merely 0.1%, upon the closing bell. One has to remember than yields and bond prices trade in opposite direction, therefore the increase in demand of bonds reduces the yield return on that same bond.
    Yesterday’s session presented a wave of data, as the economic calendar showed that unemployment jumped in Switzerland to 2.7%, while Canada battled is gloomy economy by reducing its interest rates to 1.5% (more than analysts had expected). Market spectators will shift their eyes to news headlines today, rather than follow economic data, as during early hours the $15 billion auto bailout plan was agreed by democratic congressional leaders and white house officials. Even though the deal has yet to pass through congress, many analysts are expecting their approval due the recent crisis.

    ‘Volatility’ continues to be the word that describes recent price action on the Forex market, as it is affected by various news events. The USD/CAD Pair is yet again trading on support trend line after yesterday’s bullish session, while other Dollar counterparts are showing slight bullish signs.
    In addition, the USD/JPY currency pair is trading around support of 92 an area that has proven to hold in the past. A bullish stock market might help this pair form a double bottom around current levels (This should observe carefully). Support around current levels are crucial for USD/JPY traders as a break of support will lead to lower levels, ones that could reach levels of 1995 (see chart of the day week).

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