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Market Briefing for 01/21/2009

Discussion in 'Market Predictions and Reports' started by dojit, Jan 21, 2009.

  1. dojit

    dojit Private

    Nov 27, 2008
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    Market Briefing for 01/21/2009
    Wednesday, January 21, 2009
    Investors looked passed the presidential ceremony yesterday, focusing on a battered economy. With no optimistic speeches and economic data continuing to paint a gloomy picture, market participants were left with no other alternative that to sell throughout the intraday session. Upon the opening bell certain sectors gapped down, plummeting throughout the day. The financial sector took a major hit, dropping by over 16%. The U.S major indices closed the session down with losses of approximately 5%.
    The negativity spread throughout the global markets, hitting Asia and then continuing to Europe. The Nikkei dropped by over 2% while the European indices opened in negative territory. As the session progressed, Dollar buying intensified as investors fled to safe haven. The Dollar index broke through prior resistance and headed into recent consolidation. (Further analysis is shown on the daily video)
    Even though U.S futures are pointing to a positive start, caution should still be taken and the end of the session should be carefully observed; for indication of relative strength. One has to remember that while the indices could receive bullish days, economic data continues to pound on sentiment.
    On the currency market, major pair selling increased across the board, as expectations of further rate cuts by the ECB and the BOE sent the EUR/USD and GBP/USD plummeting. The GBP/USD hit a 5 year low, breaking support of 2001-2002. Traders should make sure that the pair is now showing a clear break, in order not to get whiplashed around current levels.
    Gold recently bounced off of trend line support and followed through yesterday with a bullish candlestick. Gold continues to linger around the 875 level due to the economic situation, despite a sharp decrease in oil prices.
    Looking forward, President Obama is expected to meet with his advisors today and discuss the completion of the bailout plan, intended for the financial sector. While the INS and OUTS of the plan have yet to be finalized, according to Bloomberg news, the financial sector could receive an additional aid of over $50 billion.
    Across the globe Japan will be releasing its widely watched Tankan survey, an indicator that measures the state of the Japanese economy. Later on during the night the BOJ will be releasing its interest rate decision. Analysts are expecting a “no change” statement.

    GBP/USD -Monthly Line Chart
    *courtesy of netdania.com

    Market Pivot Points

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