STOCKS
Apart from Nifty, the other indices are all trading lower and look bearish for the near term.
Dow (23592.98, -2.11%) declined sharply and could come off towards 23000 on a break below 23500. DAX (10772.20, -0.86%) has room towards 10500/400 if it is unable to break above 11000 just now. While the overall trend is down, the index is trading near support levels and is likely to bounce back from here or at the least remain stable for the near term.
The Nikkei (21242.66, -1.23%) seems to have been pulled down on a stronger Yen. Note 21200 is an important 3-day support and while that holds, preference is for a bounce from here back towards 22400 and higher. Break below 21200 would initiate fresh lows seen after Sep’17 levels. Watch price action near current levels.
Shanghai (2573.37, -0.95%) is bearish while below 2650. The 3-day and weekly charts suggest a fall towards 2500 and lower in the longer run.
Nifty (10888.35, +0.77%) has scope of rising towards 11000 while it sustains the rise above 10850.
COMMODITIES
As mentioned yesterday, some volatility has set into the markets. Weakness in the US Dollar has lead to a slight rise in Gold and Silver while Crude prices fell sharply on bearish sentiments after data stated a rise in US inventory levels.
The US crude inventory data showed a rise in inventories by more than 1mln barrels between Dec 11-14th bringing in oversupply tensions as the market sentiment seems to tilt to the downside.
Brent (58.98) and Nymex WTI (49.68) have fallen and are trading lower contrary to our expectation of seeing a bounce mentioned yesterday. Note important supports at 56.50 and 48 on Brent and WTI respectively. Prices May continue to fall to test these support levels before bouncing back from there.
Brent-WTI spread (9.3) has risen sharply. While there is resistance near 10, we could possible see a fall soon from current levels.
Gold (1251.80) has risen contrary to our expectation of testing 1230 first. While the broad trade region is likely to remain in the 1230-1260 region, we could see a test of resistance at 1260 in the next 1-2 sessions.
Silver (14.76) has been falling after testing immediate resistance just below 15. The price could now be headed lower towards 14.25-14.00 in the near term. Price looks bearish for the near term.
Copper (2.7495) is possibly towards the end of the ranged sideways movement between 2.70 and 2.85. No major movement is expected just now while we wait for the price to see a sharp move soon.
FOREX
Although Dollar index (97.08) has seen a fall from levels near 98, it would be important to break below 96.50 to set a bearish trend for the near to medium term. For now while the Dollar trades lower, we could see some strength in the major and EM currencies today. View for at least the next 1-2 sessions looks bearish.
Euro (1.1353) has not been able to sustain a break below 1.13 and while the US Dollar trades weak just now, Euro could test 1.14 or higher in the near term.
Dollar Yen (112.68) has scope to come off towards 112.50/20 within the current fall from where a bounce could be expected. Near term is bearish.
Euro-Yen (127.87) is almost trading at immediate support levels and could soon see a bounce from here back towards 128.50. Failure to sustain above 127.60 could initiate fresh bearishness towards 126.
Pound (1.2621) is within the near term downward channel. While below 1.27, the currency could come off towards 1.2450-1.240 in the near term.
Aussie (0.7186) has bounced from immediate support at 0.7150 and while that holds, we could see a rise towards 0.725in the next few sessions.
Dollar Rupee (71.5550) could come off towards 71.40/20 today on weaker UD Dollar and Crude prices. Although current NDF is trading at 71.60, we may prefer some down-move today.
INTEREST RATES
Overall the global yields are all trading low and look bearish for the near to medium term.The directional trend is down with some small corrective upmoves.
The US yields have fallen and are trading lower just now. Medium term looks bearish. The 5YR (2.68%), 10YR (2.85%) and the 30Yr (3.11%) are down from 2.72%, 2.89% and 3.14% respectively. While the resistance in the very long term is holding for now the US yield could continue to fall. The 5Yr, 10Yr and the 30Yr could fall towards 3%, 2.8% and 2.6% respectively.
The UK-US 10Yr (-1.72%) has broken above long term channel resistance and while that sustains could head higher towards -1.62% levels in the near term. The UK yields have bounced a bit and could soon come off again towards lower levels in the medium term. The 10Yr (1.13%) has resistance near 1.1520% from where a rejection could be see pushing the yield back towards 1.05%.
The Japanese yields look bearish in the near term and are trading low for now. The 10Yr (0.03%) could come off towards 0.021% to -0.005% in the near term.
