Jan 14


  • BY: Donal Kelly
  • January, 14th, 2016 20:29 +00:00

Good evening,

after yesterday selloff today US indices have positive momentum, with the DJIA up 294.48 points at 16,445 (+1.82%) and the Nasdaq Composite is gaining 115.1 points at 4,641.17 (+2.54%). Crude Oil is rising 68 cents at 31.16 $/barrel (+2.23%).  If long term investors may place sell orders when global indices are rallying because they have low tolerance with volatility that is above its historical average, Crude Oil traders may consider oversold the commodity and start to accumulate on weakness. Crude Oil lost ground on 2014 and 2015 as well meanwhile US indices gained in 2014 and were nearly flat last year. This long term divergence on risky assets that started 2 years ago ( on 2012 and 2013 Crude was in a trading range and US indices soared) may end soon, and in that scenario energy commodities may develop a medium term positive trend and stocks should start a bear market.

In the FX market EurUsd showed a negative correlation with Indices, confirming the preference of the Euro as a funding currency for carry trades. GbpUsd made a double bottom, with the Bank of England that does not see inflationary pressure thus the rate may reach its 2010 low, just 200 pips from current market price. Cable is trading at 1.44. Short term long opportunities for Kiwi and Aussie dollar, but there is a significant gap risk to keep opened positions with those pairs during the weekend.

Gold is losing its momentum, and retraced 3 sessions out of 4 this week. The good news for bullish investors on the shiny metal is that the commodity found support on the 61.8% Fibonacci level (100% @ 1,046.46 and 0% @ 1,112.45) of its short term positive wave.  Gold is losing 10.9$ at 1,076.2  $/oz (-1%).

Tomorrow the most important event of the day will be US Retail Sales at 13:30 GMT and then the last event in the calendar will be the Reuters/Michigan Consumer Sentiment Index at 15:00 GMT.

(20:20 GMT)