2014/12/19 TrendView VIDEO: Concise Highlights (early)
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Run Rabbit Run. Yep, the old song title might apply to a particular equity market population right now: the bears. And it explains a lot about Thursday’s US equities explosion. Consider that there was supposed to be a global financial crisis on the contagion from Russia’s (and other oil exporters’) weakness due to the crumbling Crude Oil price over the past six weeks. And for a while the developed country economic assumptions and equity market trends were acting like this could be the case, and not just another version of the 1997 Asian Contagion.
However, across time it became apparent that Russia was less likely this time than in either 1998 or 1986 to experience a financial meltdown. The reasons for that are explored in yesterday’s Global View post’s opening comments, with a link to a very concise explanation from the folks at the Financial Times. Once Russia and the ruble appeared at least ‘stabilized’ along with Mr. Putin’s upbeat speech Thursday morning, a lot of the threat goes away. And think about what else the equities had as macro influences: a still accommodative Fed with other banks pushing QE, all of which is into very much improved economic data of late (after previous dire serial weak indications), and to the degree people put any faith in it that includes a major Chinese upward revision to 2013 GDP.
So it was no surprise that all of the bearish rabbits were running as fast as they could from US equities that had favored them so significantly from early last week until Wednesday. The worst case scenario is not a market turning against one; that happens. It is when it turns viciously that real problems occur. We suspect a good deal of Thursday’s extended strength was the bears pushing the market up on themselves.
Video Timeline: It begins with macro (i.e. fundamental influences) discussion of some of the factors noted above, along with strength of Friday morning’s economic data out of Japan, the Euro-zone and the UK. It goes on to note that there is little influence from North America today, with only Canadian Retail Sales and the US Kansas City Fed Index.
It moves on to the DECEMBER S&P 500 FUTURE short-term trend view at 02:40 and intermediate term at 06:00, with OTHER EQUITIES from 08:00 and GOVVIES at 12:30 with only mention of SHORT MONEY FORWARDS at 16:45. FOREIGN EXCHANGE begins with the US DOLLAR INDEX at 17:30 followed by only mention of EUROPE AT 19:45 and ASIA at 20:25 prior to returning to the DECEMBER S&P 500 FUTURE short term view at 21:00 for a final look and additional perspective. _____________________________________________________________
Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion and TrendView Video Analysis and General Update. Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Read more…