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Market Briefing for 01/30/09

Discussion in 'Market Predictions and Reports' started by dojit, Jan 30, 2009.

  1. dojit

    dojit Private

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    The markets dropped but volatility failed to rise.

    The U.S markets closed yesterday’s session deep in red, as housing data reminded investors that the economy is not yet out of deep water. New home sales dropped by an astonishing rate, falling 14.7% due to the ongoing slowdown. Even though the Fed kept its fund rate at previous levels, stating on Wednesday that it is ready to take further measures in order to control the current crisis, bullish traders failed to hold up the market’s price as bears overpowered them with selling pressure.

    After gapping down, the major indices tried to recuperate but failed to maintain strength. During early trading hours the indices lost their strength, erasing all of Wednesday’s gains. On the Asian market, stocks dropped, pulled down by financial and techs. Japan’s unemployment jumped to 4.2% compared to a previous 3.9%, while their construction orders plummeted by 27.3%.

    To date, a high valued Yen together with a global economic slowdown, has affected Japan’s prime source of income- exports. The Bank of Japan has already reduced their central bank rate to a low of 0.1% and now officials are considering buying corporate bonds to help the situation.

    Despite all of the pessimistic thoughts in the market, volatility didn’t increase by magnitude levels. The Dollar increased after forming two reversal candles around 84.5 support. The Dollar closed in range, on speculation that the U.S economy will still experience further problems before fully recovering. Euro related pairs dropped today on weak economic data. Eurozone’s inflation data dropped to only 1.1% yearly, while unemployment jumped to a whopping 8%.

    Looking forward, today’s U.S session is going to close another hectic week of trading. GDP results from the U.S surprised investors dropping by less than expected, showing a negative result of 3.8%. The U.S markets have just opened and are trading in positive territory. It is advisable to observe the end of the session determine relative strength or weakness.

    Trading Tip- When receiving a candlestick that points towards a potential turnaround, it is advisable to wait for a confirmation candle in the desired direction. On our last video we stated that despite Wednesday‘s strong bullish day, confirmation is required. Yesterday’s session failed to provide confirmation.

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    GBP/USD Daily Chart

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    Market Pivot Points
     

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