© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because today’sTrendView Brief Update is a pointed discussion of the most important trend implications of the recent sharp criticism of quantitative easing efforts. Along with the tumultuous situation in Spain yesterday, the equities were no longer trusting that the central bank QE-phoria was enough to bolster the markets all on its own.

From a technical trend perspective there is the very sharp downward acceleration of the previously limited correction in the December S&P 500 future after the explosive, QE-driven rally earlier this month. In light of the positive balance in the economic data thisweek (especially out of the US), it is surely the loss of confidence in the effectiveness of quantitative easing efforts that explains the sudden reversal of the previously firm equities trend activity.

This gets back to the question we have posed on many occasions over the past two years…

…regarding whether extensive liquidity provision to stem the near-term crises actually amounts to anything that will reinvigorate global economic growth? As our regular readers know, we have been skeptical of that from the outset, and increasingly so of late.

What we know for certain is that the central banks are “all in” on major quantitative easing efforts. As we and quite a few others have questioned even prior to recent expressions by the heads of the regional Federal Reserve Banks and other financial luminaries, what if all this QE cannot really do much to solve problems that are far removed from the lack of liquidity? And along with other factors, that would seem to be something that is now being reflected in the markets.

Enjoy the read, and as always…

Thanks for your interest.

© 2012 ROHR International, Inc. All International rights reserved.

Very short and sweet today, because all of the perspective is still much the same as our expectations last week that QE3 can give equities boost market boost, but does it help the global economy? Even though the equities spent all of last week in a more reactive mode on the downside, they are likely still good as long as they hold some key near-term lower supports.

The quarterly financial futures expiration rollovers are upon us again as well. The early month expiration of the German Bund future was followed last Wednesday by the US T-note and T-bond, as well as Thursday’s S&P 500 future expiration. All of which has an impact due to the discounts to the September contracts.

That said, this is another late week influence week…

 …and not just for the various European meetings and pronouncements. As the last week of the month, it sees all the typical major economic data for that period. And while yesterday’s German IFO, today’s US Housing and Consumer Confidence, and Wednesday’s US New Home Sales are of note, Thursday and Friday are still more prominent. Please use thelink in the right-hand column to access this week’s Report & Event Summary Perspective for more on all of that as well as the technical trend psychology.

General Market Observations

While questions remain over the effectiveness of the quantitative easing programs in preventing crisis in Europe or fomenting a stronger US recovery, for now the strength of the equities cannot be doubted. As noted early last week, they would be likely to hold the first pullback, and that is exactly what transpired on the recent December S&P 500 future tests of 1,445-40. All of the intermarket influences will remain in place as well.

The response of the primary government bond markets, foreign exchange, Gold and the other commodities is all as expected, even if the govvies have been a bit stronger than one might’ve expected in light of the sustained equities bid.

Extended Trend Implications

Primary government bonds broke important port levels like December Bund future in the 140.00 area, even though it has pushed back up to the top of that range at 140.50. Much above that it might be ready to test 141.00-.30 once again.

The US Dollar Index is rallying back up toward the major failed congestion in the .8000 area, and EUR/USD has only dipped slightly back below the important 1.3000-1.2950 range. That slippage is likely due to extra concerns about the lack of consensus on the next steps in the various European bailout efforts.

Thanks for your interest.

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column. The Technical Projections and Select Comments from last week are alreadyavailable and still relevant via the link in the right hand column. The Summary Perspective on Key Influences will be posted later this evening, and we hope you find that useful as well.

It was a light data day, and that is going to be the case through most of this typical last week of the month. The heavy economic releases do not occur until Thursday into Friday.

While the German IFO may have also been a bit weak this morning, the QE3 psychology(at least in the near term) remains ‘bad news is good news’, at least insofar as it reinforces the degree to which further quantitative easing is necessary. And that is regardless of whether it actually helps the real economy in the longer run.

Looks like ‘Buzz Lightyear’ Bernanke (“To infinity and beyond”) triumphs for now, abetted by the others that have joined the global Central-Bank-athon QE Festival. And the really big economic flow this week will not come until that typical end of month late week data. So look for markets to trade around current ranges until later this week unless there is some sort of geopolitical shock.

General Market Observations

As we noted last Thursday, while we were are skeptical of the equities in the intermediate term, December S&P 500 future rally above 1,445-40 on the major Fed QE3 influence remains the key influence keeping it constructive for now. There are other seasonal technical factors assisting the near term upside momentum. As such, even though it stalled right near the interim 1,462 resistance on Friday, it has not yet come close to violating the more important lower supports necessary to reverse the current up trend. As long as it continues to hold 1,445-40 it will not only likely retest 1,462 but also extend the rally to the September contract high of the rally up at 1,474.50; and may even push on to higher resistances prior to a more major intermediate term top.

Thanks for your interest.

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because yesterday’sTrendView Brief Update is a pointed discussion of the most important trend implications of the seemingly ever-expanding quantitative easing efforts. From a technical trend perspective there is the very orderly and limited correction of the December S&P 500 future after last week’s explosive, QE-driven rally.

In light of the negative balance in the economic data this week (especially out of Europe and China), it is surely the confidence in the volume (if not the net effectiveness) of quantitative easing efforts that helps to underpin the equities rally. Other central banks either joined the party (Bank of Japan on Wednesday) or reaffirmed their commitment to monetary largesse this week. Of course, all that is occurring under the cover of leading ‘easy money’ guru Ben Bernanke, who is nothing less than the ‘Buzz Lightyear’ of quantitative easing: “To infinity and beyond.”

And for now he seems to have carried the day in spite of the relatively limited potential for rewards and significant risks accompanying this highly aggressive further liquidity expansion policy. We will have much more for you on that from highly respected sources early next week. But in the meantime…

…the most important aspect is the degree to which the December S&P 500 future managed to hold the bottom of the four day selloff yesterday morning at a critical support. It traded at no worse than the top end of major violated 1,440-45 resistance (now prominent short-term support.)

And as the intermarket relationships between the various asset classes are back to classical tendencies at present, that drives the trend perspective on everything else from primary government bond markets through foreign exchange into commodities, metals and energy.

That is the reason why yesterday’s analysis was indeed so brief. As it notes, much of everything else which has transpired this week is very consistent with the equities trend activity as spelled out in our assessment from Tuesday evening’s Weekly Report & Event Summary Perspective and the Current Rohr Technical Projections – Key Levels & Select Comments that were also updated at Tuesday’s US Close. Both are available through links in the right-hand column.

Also consider reviewing our Wednesday post US solutions after election? NOT Likely!!which includes our letter in the FT on the US political scene (in case you missed it previous.)

Enjoy the read, and have a great weekend.

Thanks for your interest.

© 2012 ROHR International, Inc. All International rights reserved.

Very Quick Post indeed after the notice of our Summary Perspective being available earlier today. Yet, it seemed important to share our perspective on some US political matters that impact the potential Fiscal Cliff. Substantially that is the degree to which there is much talk of, “Nothing will happen until after the election.”

As we have noted previous, that carries with it the implication (or at least encourages people to draw the inference) that somehow after the election the highly partisan US Congress and Executive branch will find a way to heal their differences, and it will all be put in order. That’s quite a hostage to fortune.

And especially so in the context of one aspect that highlights the warped US politicalzeitgeist. The Financial Times was kind enough to publish my opinion on that today in theLetters section…

…on the degree to which the broader electoral bases in the US seem to be working diligently against their own enlightened self-interest. That should be apparent from how the supporters of each side have fared over the past 3 1/2 years.

I hope you find An uninformed electorate blights American politics a good read, and some interesting thoughts. The online version  also has links to other interesting related letters and articles, including the very good Comment by Edward Luce on the degree we are at risk of going over the Fiscal Cliff. My perspective focuses on the broad tendencies of the voters in each camp, and why their representatives in Congress are more likely to be constrained by the ideology of their supporters than find common ground after November 6^th has come and gone.

What is everyone expecting? Are these two sides that could not prevent the problems into August of last year, with even the so-called Super Committee failing to enact a plan other than the draconian directives of the Fiscal Cliff program, and a President who almost totally ignored the findings of his own Budget Advisory Committee all going to come together in a group hug and sing Kumbaya?

When the major electoral bases are voting more so on ideology than their practical experience of the Obama administration, further problems seem a far more likely outcome than political and fiscal reconciliation.

Enjoy the read, and as always…

Thanks for your interest.