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Technical, fundamentals

Posted By Peter Boockvar On November 27, 2009 @ 11:43 am In MacroNotes | Comments Disabled

As technicians don’t care about fundamentals, according to them, in light of the Wednesday morning news from Dubai that so shocked markets on Thursday, we can look at the charts to see at what levels the buyers and sellers acted today. The 50 day moving average in the S&P futures is 1070 and we traded as low as 1067 this morning. The 50 day MA in the NDX futures is 1737 and they stopped at 1742 this morning. The Russell 2000 has been the laggard of late as it remains below its 50 day MA of 597 and on the flipside the DJIA has been the outperformer, remaining well above its 50 day MA of 9978 at the lows of the opening. Where the Dubai events go from here has much to do with the response from Abu Dhabi. On one hand, a no further bailout message may be highly disruptive and painful in the short term and can domino into other markets but on the other hand, debt restructurings and debt elimination is healthier for the long term.

One other stat to add to my above note, the US$ index got as high as 75.76 this morning and its 50 day moving average is 75.85. The US$ index has not closed above its 50 day moving average since April. An aside, here’s a different view of today’s US market response to the Dubai news. Since the news hit at about 7:30 Wednesday morning, the US market reaction is more of a reaction to the Asian stock market reaction on Thursday which then followed with the sharp selloff in Europe. Or, this is just a delayed reaction to the legitimate concern with the possibility of a sovereign debt default that wasn’t fully appreciated here on Wednesday.


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