Market Report: Deutsche Bank and Pound, in FOCUS.
Good Morning Traders,
All the stocks market capped off a volatile trading week with gains on the last Friday, after alternating between both sharp losses and gains in the price of crude and after Deutsche Bank fell to its lowest price ever as echoes of the 2008 financial crisis started reverberating through the market and more specifically the banking sector. The DB collapsed to an all-time low on Thursday, falling as much as 24% since the initial demand for a whopping fine from the DoJ. With that said, the stock recorded its best trading day in 5 years on Friday – at all-time high volumes – after the global news agency, AFP, reported that the bank is close to reaching a very much scaled down settlement price of $5.4 billion.
And today also, we see a very positive market reaction after JPMorgan CEO Jamie Dimon told CNBC that rival Deutsche Bank had plenty of capital and liquidity. So the speculation is high and the consequences for all the financial sector, also. This as a settlement with the Department of Justice is awaited. And Richard Portes, President at Center for Economic Policy Research has been looking at Deutsche and agrees with JP Morgan CEO that Deutsche is neither illiquid nor insolvent.
But technically looking the trend of the markets, the correction has been relatively mild with the initial drop bottoming immediately, rallying, and then entering a narrow but volatile trading range. This could be about to change. The DJIA is getting relatively weaker than SPX, and this is always a warning sign.
The indicators look ready to turn down, which would continue the declining trend that the MACD started at its previous mid-July top and that it has not been able to reverse successfully since then. The SRSI is very close to giving another sell signal, and the A/D indicator may already be in a declining pattern. There is nothing bullish about the picture that the daily chart shows us. Rather, it looks more like the index is ready to accelerate its correction. So we need to be aware about that another bearish trend can be close.
For this week in the economic calendar, the most important data is the September employment report, the big number coming out on Friday. This time around the number will need to be strong for the Fed to stay on track to hike rates come December. Economists project that 176 thousand positions were added to the American job market in September, with the unemployment rate coming to 4.9%.
Yesterday, after the announcements of the BOE, the price reaches the highest level in 3 years and then the correction started. Today, we see how the EUR/GBP still up, very close to the stronger resistance: 0.8754.
Graphics by: www.etoro.com
After a few corrections from Monday, is possible that today the amazon stock will be rising to the all time high level, breaking records. The price of support for today is at 832.21 usd.
Graphics by: www.etoro.com
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