hello,
In today's entry I want to show the behavior of the index E-mini SP500 between 15-17 July.
But before I show You very interesting charts together with possible scenarios for the next few days, it is worth recalling what were received the most important information, which influenced the increase in volatility in these days.
July 15, 2014
Germany – ZEW Index: 27.1; expected: 30.0; previous: 29.8
The July decline was 7 the next, and recently such a situation took place in November 2011. But then it was known that behind this euro crisis, now the obvious cause is not. Not only that, the ZEW in all these seven months, not only declined, but each time was below expectations! So economists are predicting this indicator all the time hoped that the deterioration is temporary.
USA – retail sales in June: +0,2% m/m; consensus: +0,6% m/m; previous: +0,3% m/m; Revision of the previous reading to +0,5% m/m
Yellen – summary of final statement
Yellen in your text writes about many obvious issues like that GDP fell in the first quarter of the reasons the weather. Directly mentioned that the unemployment rate is 6.1%, and PCE inflation measure of 1.8%, but there is no mention that these better than expected after the data have any impact on the assessment of the situation by the Fed. Not only that, Yellen quickly adds that the situation on the labor market must continue to improve and indicates a low-growing wages, and emphasizes that the majority of the members of the Fed expects inflation to remain below 2%. Disputes also focus on the weakness of the real estate market.
Also the same occurrence, in the context of data from the U.S., had a mild accent. If the Fed ignores the rapid improvement in the labor market and higher inflation.
The effect of the head of the Fed: Discount on Wall Street, especially Internet companies;
July 16, 2014
USA – Industrial production (June) m/m: 0,2%; expected 0,4%; previous 0,6%
The head of the Fed announced that at the end of the year, the central bank will communicate how to reduce the balance sheet, which as a result of programs QE1, 2 and 3 has grown to total over $ 4 bln. Yellen said that discussions on this issue are advanced and the Fed will share the conclusions, when they will be completed.
"Some asset prices may be on the high side"
July 17, 2014
USA - new sanctions imposed on Russia in connection with the conflict of war with Ukraine:
1) lack of access, to the issue of market shares and debt over 90 days (Rosneft has $ 13.7 billion of maturing debt this year);
2) restrictions for companies such as Rosneft, Novatek, Gazprombank, 8 companies from the defense sector.
The ECB will reveal the results of AQR at the end of October. Together with the results of the assessment of asset quality in banks will be the results of stress tests for individual banks in the euro zone.
USA – permit for the construction of houses: 963 thousand; expected 1040 thousand
Housing starts: 893 thousand; expected 1018 thousand.
The strong increase in volatility in the markets after the information about the shooting down civilian passenger aircraft flight MH17 on the territory of Ukraine by Russian terrorists.
Conclusions:
As you can see the information that appeared on the market there were a lot and are only listed by me first. It was this information rather negatively perceived by investors. As it turned out bad information was a good opportunity for huge smart money "to pack" in Futures E-mini SP500.
bad and good informations = good informations because smart money rules
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| chart 1. E-mini fSP500 Index, H1; 2014-07-25 |
On the chart above clearly shows increased turnover, where the market under the influence of bad news coming out of the market or take short positions. On the other hand, the financial institution that uses the fear of the market and buys the whole market. in the next phase when the market is already bought by using definitely less money can lead Index, to new highs what now realized.
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| chart 2. fSP500 Index, Daily; 2014-07-25 |
On the chart number 2 I presented two scenarios that assume continued upward trend with an attack on 2000 points in the coming weeks.
I think that on the chart presented very clearly so I will not elaborate a lot. In case of the scenario number 1 or 2 will decide the next few days. In the case of overcoming levels of 1982 points we should observe the continuing trend growth and output of more than 2000 points. If the market shows weakness it is possible to going down around in 1918 points.
regards,
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
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