Global Market Wrap: Green European Markets

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Global Market Wrap:

Green European Markets

Equity Futures: Dow +33.00. S&P +4.70. NASDAQ +7.75. Japanese Nikkei -40.00. German Dax +12.00.

European Trade: European equity markets opened above the break-even line on Wednesday, after in the prior day of trading mostly lower. Overnight, the Asian cash equity markets and the U.S. futures indexes also posted gains, on light volume ahead of the Thanksgiving Holiday.

The developed and the emerging markets both moved higher in European Wednesday trade, posting gains of around 0.50%. Since the beginning of the trading session, Italy’s MIB has added 0.60%, while the Swiss Stock market advanced 0.45%. In emerging Europe, Poland and the Czech Republic gained 0.45% and 0.30% respectively.

&P futures have advanced 4.70 points since the prior cash session closed, and are now testing the 1110.00 area, where the market formed a swing point high over the last two weeks of trading. Similar patterns could were observed in the German Dax and in the U.K. FTSE, where the market is testing the resistance area of the last few days of trade at 5360.00 on the FTSE 100, and 5810.00 for the Dax 30 index.

S&P Technical View: TheLFB Member Charts
4 Hour Chart Flows: Long Price Points: 1082, and 1112 Looking for: A break of 1112 to signal mid-term sentiment

Momentum: S&P futures went into long mode in the near-term on Nov 13th and have easily held that trend, and that has allowed the tests of 4 hour chart support to be bought. There is a tight sideways channel forming and that is allowing the move from overbought to oversold and back again, to be completed over a 5 day period. It seems to be a meander higher at the moment.

Elliott Wave: S&P futures traded significantly higher over the past two days, towards the 1112 resistance area. Equity futures look bullish right now, and are expected to make at least another push into the highs over the mid-term, after the 1082 support area held well.

The wave count of a black wave IV) has been re-worked into the structure shown on the 4 hour chart, highlighting the recent bottom around the 1082 zone, followed by a Long wave V) that is in progress. Any break of the 1112 top will put a 1120 target in play, which should drive the majors higher against the U.S. currency.

Sector Moves: Almost every sector headed higher in European trade, but the trading momentum was relatively small. Strong gains came from the travel & leisure sector, which advanced 1.70% on the performance posted by Compass. The U.K. company Compass surged 5.70% after it announced higher than estimated yearly profits. Right now, Compass is the best gainer in the FTSE index, followed by the mining companies, which were pulled higher by the uptrend seen in the metal market.

The European insurance sector added 1% in Wednesday trade, after a number of positive news reports hit the newswires. The insurer Old Mutual gained 2%, after being upgraded by Goldman Sachs to “buy”. A different report showed that the giant Munich Re is planning to take full-ownership of the insurer Ergo Versicherungsgruppe, something that sent Ergo’s shares up 17% in intra-day trade. At the same time, Munich Re lost 0.50%.

Economic Moves: The European and U.S. calendars are loaded with important news reports in Wednesday trade. Throughout the European session, a report showed that the U.K. economy contracted 0.3% in the third quarter, less than initially estimated.

Ahead, investors prepare for a very busy U.S. session, which has a long list of important news reports, including: Durable Goods, Unemployment Claims, Personal Spending, Consumer Sentiment, New Home Sales and Crude Oil Inventories. Consequently, the U.S. session is expected to be volatile.

Crude oil was recently trading at $76.30 per barrel, higher by $0.30

Gold was recently trading up by $13.40 to $1180.80.