Pre-Market Brief

Good morning. US equity futures are moderately higher, sp +10pts, we're set to open at 2089. USD is cooling, -0.3% in the DXY 99.60s. Metals are bouncing, Gold +$3, from a new multi-year (overnight) low of $1045. Oil is +1.0%


sp'60min

Summary

ECB: initial news... deposit rate cut 10bps, from -0.2% to -0.3%.

Other measures due to be announced at the press conf'.

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Update from Mr C.



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Overnight Asia action

Japan: a lot of chop.. closing effectively flat.

China: again, opening weak chop, but then latter day rally, +1.3% @ 3584.

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Have a good Thursday


8.35am... ECB announce: extending monthly QE of €60bn from Sept'2016 to March 2017.

Equities a little choppy, sp +2pts.

Oil +1.4%... with the OPEC meeting tomorrow.


8.40am.. Euro is soaring. +1.8%...

sp' has cooled from +12pts to -2......  as the market battles it out to pick a direction.

Broadly.. we should still climb from current levels... not least if Oil can climb.


8.56am.. sp' +1pt.

Euro +2.4%..... and that is helping the metals/oil.

Q. Has the Euro seen a key floor, with the USD seeing a double top at DXY 100?

Hmmmmmmmmmmm


9.00am.. USD flash-crashing.... -1.3%......  was rather stable at -0.3%.....

Price action is getting increasingly wild.

China continuing to battle upward

After Monday's net decline of -5.5%, the Shanghai comp' was on the edge of losing key support. There is little doubt the PBOC have been 'meddling' again. The Wednesday gain of 2.3% @ 3536, brings the SSEC within range of the 200dma, but more importantly.. the monthly 10MA, both in the upper 3700s.


China, daily

China, monthly

Summary

Suffice to say.. we have a clear spike floor from the Monday low of 3327.. on rising support.

More than anything, if the Shanghai comp' can break back into the 3800s.. and hold above, it will open the door to 6K by end 2016.

I realise that is a crazy scenario, but then.. in summer 2014, when I touted 5K 'by late 2015', that too was deemed crazy. It happened 3-6 months earlier than even I had expected.

I will be keeping a close eye on the China market.. but then... I always do!


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Looking ahead

Thursday is packed...

The ECB are set to announce another policy update, with a Draghi press conf'.

Data: weekly jobs, PMI/ISM service sector, factory orders

*Yellen is set to give testimony to the US joint finance committee, and that will likely get blanket coverage from 10am-1pm.
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Goodnight from London

Daily Index Cycle update

US equity indexes closed significantly weak, sp -23pts @ 2079 (intra range 2104-2077). The two leaders - Trans/R2K, settled lower by -2.1% and -1.0% respectively. Near term outlook remains unchanged, with further upside to the 2115/20 zone... whether on the excuse of the ECB or the monthly jobs data.


sp'daily5

Trans

Summary

*Transports closed the day on a pretty lousy note, having tested rising support. A Thursday close <8K would be a real red flag.

A weekly close <8K would be a serious early warning... and will need to be carefully kept in mind.
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As for the sp'500, the daily candle was of the bearish engulfing type, and that does favour the equity bears in the near term.

Despite the daily close, renewed upside into the 2100s still looks highly probable.

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a little more later...