STOCKS
Dow (24754.75, -0.15%) came off a bit after almost testing 24800 levels yesterday. It could possibly remain stable for another session or two before heading towards 25000 in the coming sessions. Near to medium term looks bullish.
Dax (13215.79, -0.72%) lost all gains seen yesterday, coming back to levels near 13200. Immediate support is visible near 13150-13100 levels and while that holds, the index could probably attempt another rise targeting 13400 in the next few sessions.
Nikkei (22853.23, -0.06%) is stuck in the narrow 22600-23000 region with the upper level being an important near term resistance. Unless a break above 23000 is seen and sustained, the index could be trading sideways near current levels for some more time. Note that 23000 has not been able to produce a sharp rejection and could be an indication of bears losing out some strength just now.
Shanghai (3296.42, 0%) could be stuck in a sideways phase within 3320-3260 region and while that holds, there is lack of clarity on further direction the index could take. Near term likely to remain stable.
Nifty (10463.20, +0.72%) and Sensex (33836.74, +0.70%) have risen sharply yesterday. Nifty could test resistance near 10500-10550 levels today while Sensex could also head towards 34500. Thereafter a small dip or at least some sideways consolidation would be expected before deciding on further direction.
COMMODITIES
Gold (1263.81) has moved up a bit as Dollar seems to be turning a little weak. While the Dollar Index (93.43) is below 93.75, Gold is likely to sustain above 1260. As mentioned earlier, immediate upside could be limited to 1280 for Gold.
Brent (63.91) and WTI (57.75) are attempting to move up eventually. There is room on the upside for Brent towards 68 while WTI may face resistance near 59 itself. Either of the two is likely to impact the other. In case, Brent rises sharply towards 65 and higher, WTI could possibly attempt to break above 59; else a fall from 59 on WTI could slow down the rise in Brent. Need to watch the crude prices carefully.
Copper (3.1470) has come up to test 3.15 as expected and could target medium term resistance near 3.20. While 3.20 holds, another down-leg in Copper looks likely towards 3.00-2.95 levels.
FOREX
Dollar-Index (93.43) dipped yesterday after testing resistance near 94 on the 3 day candles and is currently trading below support near 93.5 on the daily candles. With the holiday week approaching, we might see minimal movement in the index, but it could still tend towards 93 which acts as support on 3 day candles; and in case of a break of the same, move towards support near 92.5 on the weekly line charts. A break below 92.5 could set off a downtrend for the index in January.
Euro (1.1843) bounced yesterday after testing support near 1.175 and is currently trading around 1.184-1.185. Along with the Dollar Index, Euro is likely to move in a narrow range (1.175-1.185) over the next few days. If Dollar Index tests support near 93 or the one near 92.5, we might see Euro move up and test resistance at 1.19. As mentioned yesterday, trend-deciders in the medium term continue to be 1.17 & 1.19.
Dollar-Yen (112.94) is maintaining strength inspite of the Dollar Index dipping, which might be due to US-Japan 10 yr yield spread breaking short term resistance and rising up to 2.4%. However, over the holiday period we might not see any significant movement in the Dollar Yen, with likelihood of it being ranged between 112 and 113.5. A break below 112 in the medium term is likely in case of Dollar Index breaking below 92.5.
Pound (1.3395) might again see range wise oscillation between 1.325-1.345 in the next few days and is currently moving up towards immediate resistance near 1.343-1.345.
Rupee (64.03) might go down towards 63.90 on the downside with Nifty looking bullish for a test of resistance near 10600 and the Euro rising up towards 1.19 gradually. There is less likelihood of a rise past 64.20 currently.
INTEREST RATES
Very sharp rise seen in the US yields yesterday. Some economists state that as the Congress moved closer to turn the tax bill into law, this would add to the deficit and signal more growth, leading to a rise in the interest rates. The 5YR (2.21%), 10Yr (2.45%) and the 30Yr (2.81%) are all up from previous levels of 2.18%, 2.40% and 2.74% respectively. If the rise sustains, the yields could rise towards 2.90% (30Yr), 2.52% (10Yr ) and 2.30% (5Yr).
Sharp break in the US-Japan 10Yr yield spread (2.40%) seen today as the US yields rose sharply. This break on the upside is very crucial and could pull up Dollar Yen and Nikkei to higher levels in the coming sessions. The yield spread is likely to rise towards 2.49% in the next few sessions.
The Indian 10Yr GOI (7.1780%) is headed towards resistance near 7.25% as mentioned yesterday and is likely to trade in the 7.25-7.155 region in the near term.
