2014/08/14: TrendView VIDEO: Global View (early)

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TrendView VIDEO ANALYSIS & OUTLOOK: Thursday, August 14, 2014 (early)

Global View: All Markets  

As we noted last Tuesday in the wake of the previous Thursday’s equity market debacle, “How quickly they forget.” All of that overly sanguine reliance on extended central bank accommodation as a key factor in supporting the equities, and the associated dismissive mentality on the various vexing global politico-economic developments, seemed to reverse in a heartbeat in the face of the continuing Ukraine-Russia confrontation and even more so the Isis advances in Iraq. It was only the US limited intervention on behalf of the Iraqi army in countering the latter threat that restored a more positive undertone to the equities. Yet that was not before the September S&P 500 future had slipped all the way to the low end of the overall late may UP Runaway Gaps at 1,890. While that was hit overnight into last Friday, by the US opening it was already back to no worse than the 1,904 high end of those gaps. (For more on all that see last Tuesday’s TrendView video analysis.)

How could this be? In the first instance, there are still some issues with the real state of the US labor situation (i.e. likely weaker than some of the headline data would suggest.) And Wednesday’s weak US Retail Sales underscores the way in which the earning power of the middle class has not kept up with those upbeat US Employment numbers.

And the other obvious factor is the Ukraine-Russia problems and geopolitical disruption elsewhere finally having an effect. That potential drag on a still weak European economy may actually be the greater influence on things moving so quickly from a ‘bad news is good news’ not just to a ‘bad news is bad news’ psych, but also what appeared to be a full blown shift from ‘risk on’ to ‘risk off’. Not much else can readily explain how September S&P 500 future that had overrun the 1,938 Objective of its late May Runaway Gap to the upside back in mid-June not only reacted right back down to it two week’s ago; it also slipped below and could not recover back above it until it had tested that more major 1,904-1,890 range support. Even in spite of the current recovery there is a sense equities might still be vulnerable due to the continued weakness of the data (which is not surprisingly being very well-received by the govvies.)

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Video Timeline: It begins with macro (i.e. fundamental influences) discussion of the politico-economic factors noted above, because we believe at this point they are having a more telling influence than the ‘rearview mirror’ economic data. In fact, equities have rallied in spite of serial weak economic data of late. It also mentions Wednesday’s more dovish than expected Bank of England Inflation Report and this morning’s weak GDP numbers for several key Euro-zone economies. It goes on to note that US influences today are light, with only weekly Initial Jobless Claims and the Import Price Index.

It moves to SEPTEMBER S&P 500 FUTURE short-term view at 02:15 and intermediate term at 05:00, then the OTHER EQUITIES from 06:20, with GOVVIES analysis beginning at 11:00 and SHORT MONEY FORWARDS at 15:45. FOREIGN EXCHANGE begins with the US DOLLAR INDEX at 20:00, jumping over to EUROPE at 22:30 and ASIA at 25:35, followed the CROSS RATES at 28:15 and a return to SEPTEMBER S&P 500 FUTURE at 32:40 for a final view and additional perspective. As this is an especially extensive analysis, even more so than usual we suggest using the timeline cursor to access the analysis most relevant for you.

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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.

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