Market signals fundamentals are for losers as stocks and the Euro rally

March 19, 2014

Okay so it’s clear that I just don’t get this market as I have written already this week but hey the market is the market and as an old mentor used to say to me all the time “it is what it is”.

Which of course it is.

Charts and levels have probably never been so important.

Anyway last night saw another night of risk on with the Aussie dollar, Euro and Yen higher along with stocks in the US and Europe while gold was under pressure again even though Vladimir Putin was at his beligerent best in a  speech to the Duma last night.

The key thing for me – and why I am out of sync fundamentally and psychologically – is that markets are simply not concerned that having won this battle without a any resistance Putin won’t try something else. Indeed markets also appear unconcerned about the Ukrainian Soldier who was killed last night and the edict that the Ukraininan Defence force has given for Soldiers to fight back if necessary.

At the close the Dow rose 89 points or 0.55% to 16,336, the Nasdaq was 1.24% higher while the S&P 500 rose 13 points to 1,872 for a gain of 0.71%.

In Europe stocks higher across the board with the FTSE up 0.56%, the DAX 0.68% and the CAC up 0.96%. In Milan stocks rose 0.86% while in Madrid they rose 0.76%.

Locally on the ASX the March SPI 200 contract is up 14 points to 5361 so stocks look set to enjoy another good day.

On Currency markets the tale of woe for the US dollar continues with weak data in Germany and the EU in the form of lower than expected ZEW surveys failing to dent the Euro’s rise and it sits at 1.3931 this morning. Likewise the yen is stronger again with USDJPY down (Yen stronger) to 101.39 again this morning and at risk of a big move lower. Sterling didn’t seem to like the moves at the BoE and is down at 1.6587 while the Aussie is closing in on resistance sitting at 0.9124 this morning.

The Aussie overnight high was in line with the high of 0.9135 a week or so back but it is closing in on the 200 day moving average and the big down trend line from the start of the sell off in March last year.

Let’s see how it is but this is big resitance and similarly could be a big break – gee whiz the US dollar is weak.

On commodities gold sits at $1,355.64 down 1% on the day as the fear washes out hitting gold. Copper is still at $2.99 lb but Nymex crude has leapt 1.51% to $99.56. On the Ags it was situation usual as volatility reigns. Corn was 1.51% higher, wheat rose 2.67% and soybeans rose 1.90%.

On the data front today we have the Westpac leading indicator of growth in Australia and then Japanese trade before the BoE minutes tonight and then at 5am AEDT tomorrow the FOMC decision.

Have a great day and good hunting

Greg

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