Pre-Market Brief

Good morning. Equity futures are moderately higher, sp +10pts, we're set to open at 2004. USD is trying to rebound, +0.2% in the DXY 94.00s. Metals are cooling, Gold -$4. Oil is -0.8% ahead of the latest EIA report.


sp'60min

sp'daily5

Summary

Equity bulls should be aiming for a daily close >sp'2110... although it is certainly not absolutely necessary.

The 2030/40s look highly probable within the next 2-4 trading days. Last line of defence for the bears is the 200dma in the 2060s.

Of course.. that is just the sp'500, other indexes, and even more importantly, other world equity markets will be offering their own important signals.
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Early mover...

NFLX -3% in the $107s... post earnings reaction. It is notable that the stock was in the $93s yesterday evening... but did manage a powerful rebound and stabilise around 106.

Earnings were a miss, but broadly, subscriber outlook is superb. I would not be surprised to see a net daily gain >$112.
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Update from Oscar


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Overnight Asia action

Japan:+1.1% @ 18096

China: a very strong day of building gains, +2.3% @ 3338. Just another 2% to key resistance of the 3400 threshold. A few daily closes >3400 would be highly suggestive the down wave from 5100 is complete...  and be a bullish sign for other world markets.
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Have a good Thursday
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8.36am.. CPI m/m -0.2%... no sign of higher prices in the short term.

Empire state manu' survey, -11....  a lousy number, but not entirely surprising considering the capital market upset from Aug-Sept.
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notable weakness, Seagate (STX) -12% in the $41s, after previewing its next earnings report will disappoint (why do they do that?).

King Dollar continues to weaken

Whilst equities saw a second consecutive day of weakness, it was also another day where the USD continued to cool. So far this month, the USD is net lower by -2.7% @ DXY 93.92. Further weakness looks due to the 90 threshold.


USD, monthly

USD, weekly

Summary

The USD continues to broadly cool from the March high of DXY 100.72. It would seem the Aug' low of 92.52 will be broken within the next few weeks. From there, it looks a simple run to the 90 threshold.

The bigger monthly cycle is offering price structure of a large bull flag... but underlying MACD (blue bar histogram) is set to turn negative in November. I would be surprised if there is sustained price action under DXY 90.


The implications are rather huge

A great many of the giant international (esp' Dow) companies have been hit pretty hard since the USD began the climb from the DXY 78s in May 2014.

If the USD does see sustained price action under the 90 threshold into 2016, that will really help give earnings a rebound.

Commodities would also likely see some significant upward pressure, notably the precious metals of Gold and Silver, and Oil.
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Looking ahead

Thursday will see the usual weekly jobs, CPI, Empire state manu', Phil' fed, and the latest EIA and Nat' gas inventory reports.

*Fed officials Bullard and Dudley are speaking in the morning, and Mr Market will no doubt be listening.
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Goodnight from London

Daily Index Cycle update

US equities closed broadly weak for a second consecutive day, sp -9pts @ 1994 (intra high 2009). The two leaders - Trans/R2K, settled +0.2% and -0.9% respectively. Near term outlook offers strong support around the 50dma of sp'1985. Renewed upside still looks due to key resistance of 2040/60.


sp'daily5

Trans

Summary

Little to add.

The last few days have been mostly chop... with what is a relatively minor retrace of the powerful wave from the (monthly jobs Friday) low of sp'1893.

Renewed upside looks due in the immediate term... at least to the 2030/40s.. and probably 2040/60 zone by the next FOMC.

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a little more later..