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

The Current Rohr Technical Projections – Key Levels & Select Comments (as of Wednesday’s US Close) are now available through the link in the right hand column. We have summarized some of the most interesting and telling tendencies below.

All of the background on the trend swings and fundamental perspective are the same as in yesterday’s Quick Post: Does This Really Get the Fed More Cred?! The most telling factor right now is whether March S&P 500 future slips below the low end of the 1,270-64 range after tomorrow’s US Employment report, or decides to take out the 1,280.90 high post weekly Close from back on October 28th.

That is because much out of that range in either direction the market is likely ready to push another 30 points. Regardless of the fact that the government bond market has managed to once again ignore the strength of equities in the near-term, that sort of significant decision in the equities will have an impact there as well.

While many of the asset classes are merely churning around key levels early this week (February Crude Oil future 103.00 area, February Gold future 1,615-30 key resistance range), there is little doubt that the euro is out on a failure below the EUR/USD 1.2860 January 2011 low (which was also the low for the year.) And yet, the US Dollar Index remains well short of its key resistance at the .8131-44 December 2009- January 2010 highs. This is likely due to two factors.

The first is that the general improvement in the economic data from extreme weakness late last year has bolstered the commodity currencies, and in turn that has restrained the bid in the US dollar. However, that just reinforces the degree to which the second (likely more prominent) factor of whether or not the overall bullish sense in the equities is going to be maintained into the end of this week is critical to all of the currencies and other asset classes. Which is true for government bonds as well, due to their ability to maintain a firm bid so far in spite of recent equities strength; and that might mean the March T-note finally fails the 129-24 support it has not even been able to test on recent selloffs if the March S&P 500 future surges above 1,300.

Thanks for your interest.

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

And then there was yesterday’s FOMC meeting minutes release. With all due respect for the Federal Reserve’s attempt to create a sense of quantitative easing (QE) without actually expanding its balance sheet, what in the world does a federal funds rate forecast for the next several years do for economies or markets?

It was shocking enough the original guidance of exceptionally low interest rates “through mid-2013″ was replaced by this new policy. But other than a triumph for Mr. Bernanke’s endless drive for more transparency what does this actually accomplish?

Consider for a moment that the Fed is eminently fallible in its forecasts. As such, all this will ultimately provide is further fodder for those who want to point to its lack of prescience in the very area where it holds sway over economic and capital markets sentiment. And as we have seen since the original extended rate projection policy was initiated in August of last year, this was not worth much more than a very brief fillip for equities; which began to fade an hour after the announcement.

General Market Observations and EXTENDED TREND IMPLICATIONS

First-day-of-the-year surge will likely end up a passing fancy, if March S&P 500 future Closes back below 1,264. However much Tuesday’s positive economic news conspired with cash waiting on the sidelines from the choppy end of 2011 trading to create a March S&P 500 future surge above 1,270, back below the 1,264 previous rally high defuses the ‘runaway’ potential. Allowing that the economic data remains somewhat mixed to the strong side, the European government bond situation is still vexed. That is reflected in many of their banks appearing vulnerable, with the commensurate weakness of European equities relative to the US. This is most evident in the performance of the DAX, which only tested upper-6,100 early-November and early-December trading highs.

As for other asset classes, March T-note future is still holding so far at no worse than mid 130-00 support, with more major support waiting in the upper 129-00 area. And while they are somewhat weaker, the same can be said for other long-dated government bond markets. Similarly in foreign exchange, the US Dollar Index held well on yesterday’s test of its late year .7950 UP Break, which is the complement to the euro failing to push back above resistance at EUR/USD 1.3050-80 even if it did manage to hold its 1.2860 support in a quiet holiday trade last week.

The energy market remains elevated as well, but that is somewhat a subset of Middle East concerns rather than purely economic indication; Iran is a critical current influence. And it is ultimately not constructive for equities if the February Crude Oil future continues to push up for any extended move back above recent 102.00-103.00 resistance in the near-term.

February Gold future is also up again today on the back of improved economic sentiment to some degree, yet also likely on the back of those same Middle Eastern crisis concerns; which admittedly extend beyond Iran. It is even possible that renewed stresses in Europe could be attracting a ‘haven’ bid back to the yellow metal, or deflate it on sharp equities weakness.

And in consideration of that somewhat schizophrenic influence on the overall trend, it is far more practical at this point to rely on the sharply defined technical trend parameters. In the event, February Gold future has very significant resistance from its previous major channel DOWN Break and weekly MA-41 anywhere in the 1,615-30 range. Unless it can once again sustain activity back above that threshold, it must be assumed that it will retest the previous congestion and recent short-term Island Bottom in the 1,557-1,526 range.

We hope you find this useful.

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

The full calendar is available through the link in the right hand column. This week is the important first economic data release week of the month, yet is less crowded in its way than some of the very intense reporting and major international meeting weeks the markets experienced last Fall. That is due in large measure to the significant reduction in officially scheduled central bank influences this week.

In addition to the continued sharp influences from any developments on the European Sovereign Debt Crisis, there is also going to be quite an impact from important scheduled economic reports and political news like the Republican Iowa Caucuses, yet fewer scheduled events and communication from central banks and bankers along with important government debt auctions.

This week is the important first economic data release week of the month, yet after this afternoon’s release of the FOMC minutes from its December 13th meeting, there is nothing until Friday’s cluster of speeches from various Federal Reserve members. The week still culminates in the typical first Friday of the month release of the US Employment report, where some modest further improvement is expected once again over last month’s addition of 120,000 jobs to Non-Farm Payrolls.

General Market Observations

Regarding the markets, better-than-expected Purchasing Managers’ Indices along with an unexpectedly large drop in German Unemployment is acting as quite a tonic for the equity markets this morning. March S&P 500 future is already above its 1,270 resistance, with the key further Tolerance being the late October lead contract 1,280.90 high post weekly Close.

However, our instinct at the top of the year is to remain circumspect pending further market activity during this very crowded economic data release week. There is also the consideration that once again the other asset classes are not fully reflecting the sort of activity that might be expected if the equities are indeed out on another major bullish push.

EXTENDED TREND IMPLICATIONS

March T-note future is holding so far at no worse than its mid 130-00 support, with more major support waiting in the upper 129-00 area. The same can be said for other long-dated government bond markets.

Similarly in foreign exchange, the US Dollar Index has failed to drop back below its late year .7950 UP Break, which is the complement to the euro failing to push back above resistance at EUR/USD 1.3050-80 even if it did manage to hold its 1.2860 support in a quiet holiday trade last week.

The energy market is up again today as well, but that is somewhat a subset of Middle East concerns rather than a purely economic indication; and is ultimately not at all constructive for equities if the February Crude Oil future continues to push up for any extended move back above its recent 102.00-103.00 resistance in the near-term. February Gold future is also up today, yet has very significant resistance from its previous major channel DOWN Break and weekly MA-41 anywhere in the 1,615-30 range.

All in all it would seem it is going to take a much more sustained upside escape from the equities (i.e. the March S&P 500 future posting a weekly Close above that previous lead contract 1,281 high post Close noted above) to confirm the top-of-the-year strength is sustainable beyond these first few days of the year.

Thanks for your interest.

© 2011 ROHR International, Inc. All International rights reserved.

We will be out of the office from today through next week, returning on Tuesday, January 3rd. This is a long-deferred and much-needed break, and we are literally switching off the screens. Hope the perspective and specific analyses we have already provided will be sufficient to support any of those who are actively involved for the next two weeks.

At this point you should have access to Current Rohr Technical Projections - Key Levels & Select Comments (current through last Friday’s US Close) and this week’s chronological Weekly Report & Event Calendar via the links near the top of the right-hand column. The holiday period trading calendar makes any effective analysis or risk assessment next to impossible.

While there are typically interesting end-of-month reports released next week, there are two reasons we did not see much point in putting out a specific calendar. The first is the minimal risk exposure of most market participants. The second is the extremely limited trading calendar due to the vagaries of market closures for holiday observations this year.

There are the early market Closings both this Friday and next Friday, and the Christmas and New Year’s Day observations following the weekends. That means after this Thursday there are only three full trading days in most major capital market centers over the following 11 days. And the major foreign exchange trading center in the UK will have even one less day in consideration of Boxing Day on Tuesday the 27th. As such, even if there is some sort of sharp market movement, it will be necessary to question whether it was more so a function of ultra-thin markets versus true trend indications? In the meantime…

Happy Holidays to all, and Best Wishes for a Happy, Healthy and Prosperous 2012.

© 2011 ROHR International, Inc. All International rights reserved.

The first media seer, Marshall McLuhan (who essentially invented the science of media’s influence on culture), famously noted back in the 1960’s that electronic media would destroy established social structures. And all he had to guide his perceptions was incipient developments in cable TV. Wonder what he would have said if the development and ubiquity personal computers was anything more than futuristic bit of imagination. [Although in the Dick Tracy comic strip they actually had wrist radios and TVs; forerunners of the PDA?]

But now we have an entire galaxy of information whizzing across everyone screens at the speed of light. And while the social structures of the 1960’s were reduced to rubble, society will always be reborn because it is a necessary cycle. However, there is little doubt the only real constant remains ‘change’, and it does seem to be accelerating.

Consider the turn of the cycle from the height of the Hippies to the end of that attempted utopian solution. After the 1967 San Francisco ‘Summer of Love’ it took two years to degenerate into the Manson murders and the Weather Underground. For the uninitiated that last group is a faction in the previously aggressive yet peaceful SDS (Students for a Democratic Society) which shifted to the pursuit of violent revolution. They had given up on peaceful pursuit of change and reverted to violence, because it seemed obvious to them that nothing was going to change. (Hence the group’s name, from the Bob Dylan lyric, “You don’t need a weatherman to know which way the wind blows.”)

Fast forward to Occupy Wall Street and what do you get?

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