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Major Support & Resistance (pivot points – explained):
Pivot: 6391; Support: 6334, 6302, 6245; Resistance: 6423, 6480, 6511
A lack of Fed clarity on QE3 tapering in its July minutes (division in ranks on timing, new discussion on unemployment target to offset rate-hike fears) did little to counter recent market anxiety about a move in September, helping the index probe lower overnight. Better PMI data from China, Germany and the Eurozone, however, has seen appetite for risk return, with the sharpest up-move since the sell-off from summer highs began 3 weeks ago.
The break above falling highs and the regain of both the 6400 round number and 200-day moving average (support) gives some hope that the 5.5% sell-off, which was more than expected if we are still considering the summer to be a consolidatory sideways shift, has run its course. Although I do emphasise the ‘some’. A break above 6460 would be more helpful in terms of a potential reversal.
For now the 100pt recovery is a good start. While things might calm for the rest of the morning, watch for US data to spice things up again in the afternoon. Some Fed officials were still worried about data at end-July. Have they reason to still be concerned at end-August? US jobs, Housing and PMI Manufacturing prints could offer markets some much needed clarity.
Fed guidance remains for tapering by year-end. Will today’s US data maintain markets’ September expectations pushing markets lower (good data = taper positive = bad for market stimulus addicts) or could some disappointing prints help push them out a touch?
It’s another month before the Fed next updates. (17-18 Sept statement). That’s a fair old wait, allowing markets to both recover and/or stew over the current taper caper and management of Fedspectations. Plenty more FOMC-sawing and volatility to come in the markets, keeping short term traders busy.
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
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