US Markets Close in the Green

Daily Analysis - 04/04/2018

US markets Close in the Green

Could this mark the end of the two month slide-o-fear the world’s markets have been riding? It’s early to say with certainty. We have not yet completed the singular one day cycle. In other words, while the US market did indeed close entirely and decisively in the green yesterday, Asia is if not in the green entirely then at press time the Nikkei and the Kospi were just barely in the red. Close enough to fully in the green given the roller coaster ride of the last 8 weeks. We expect the Euro zone markets to follow suit by closing decisively in the green too. All indicators of pre market activities show green lights all along the glide path.

DAX and the Euro Zone

Premarket activity, which as an indicator of actual market trading is a mixed bag with respect to its reliability. Our analysis is based on the knock on effect which states that when, in a highly negative environment such as we have been experiencing, the US market traders who apply the brakes to the rout by buying into the downfall and arresting the declines, is followed similarly by the Asian markets, the Euro zone markets often follow suit. It is a reliable stratagem. We will take our profits at between 120798 and 12110 today with stops set at between 11991 and 11958. A gap that formed last Thursday will close at 12128. This too is a significant indicator for us as all gaps eventually close.

GBPJPY under the Magnifying Glass

The Pound has been gaining strength against the Yen for 48 hours now. It has been gaining on below average volume so the long positions in this pair will need to be traded carefully, meaning we must monitor and make sure the stops are in before placing the trade. GBP strength has been in evidence for several days against the Franc and the USD. Hardly a long term trend but a worthy trade for end of day and hourly only. We will take profits between 150.72 and 150.107 with stops between 149.900 and 149.840.

Crude Down

West Texas Intermediary, the US benchmark crude oil has been falling steadily and gradually for the week. While today’s Crude Oil Inventory report is always a grade crossing requiring attention, we don’t expect any development to reverse the current trend. On the contrary our research indicates that the inventory will likely continue its growth as it has in 7 of the last 9 weeks. Note well that sometimes, not often, the price reacts contrarily to the inventory report’s outcome.