STOCKS
All the Indices, apart from the DAX have some more room on the upside in the near term, but chances of profit-taking are there. Japan, China and India look more bullish than Germany and USA.
The Dow (24370.10, +162.94, +0.67%) saw a high of 24474.46 yesterday, just shy of the upper end of our mentioned Resistance region of 24100-500. If our preferred profit-taking does not kick in now, the Dow may rise further to 25000 as well. In case selling does come in now, it can take the Dow down towards 23500.
On the DAX (10918.62, -12.62, -0.12%), however, the mentioned Resistance at 11000 is holding well enough over the last three days. If selling comes in, the DAX could dip to 10700 in the near term.
The Shanghai (2578.47) is up again today after a small dip yesterday, clearly wanting to break into higher ground. A break above 2627 (21-MA on Weekly Line chart) could propel it higher.
The Nikkei (20666, +264, +1.29%) is up strongly today after two days of minor profit-taking. Look for 20900-21200 on the upside now.
In India, the Sensex (36374.08, +52.79, +0.15%) and Nifty (10905.20, +14.90, +0.14%) continue to try and break above crucial Resistances at 36500 and 11000 respectively. Proper bullishness can set in once these are broken. Else some near-term profit-taking is possible.
COMMODITIES
Precious metals are almost stable with no major movement while crude prices and Copper have moved up.
Crude prices were trading slight lower yesterday as the US crude production neared 12 mbpd but thereafter the prices have risen slightly and are trading in the green just now.
Brent (61.67) could attempt a re-test of 62.5 while WTI (52.88) could target 54 in the near term.
Brent-WTI spread (9.09) is just above immediate resistance and could come off towards 8.35 and lower in the near term. This could be indicative of a fall in the crude prices from current levels.
Gold (1290.60) and Silver (15.55) are almost stable without any major movement. Silver could be bearish while below 16 and Gold needs to break below 1290 to indicate some weakness for the near term. Else a short term rise to 1300/20 could be a possibility before a sharp fall is seen.
Copper (2.6970) has risen and could be bullish for the near term on a break above 2.70 targeting 2.80/85 on the upside. Failure to rise past 2.70 could again bring the price back towards 2.65/60. Watch price action near 2.70.
FOREX
Currencies are mixed. Dollar index looks bearish while below 96.50. Euro, Aussie and Pound have risen and have some more scope to rise towards 1.15, 1.31 and 0.73 on the upside. Yen and Yuan may see some weakness in the near to medium term towards 110-111 and 6.83 respectively.
Dollar Index (96.06) has immediate resistance near 96.50/30 and while that holds, the index finds difficult to break on the upside just now. While below 96.50/30, it could come off towards 95.25/00 in the near term again.
Euro (1.1394) is in a near term channel uptrend and could bounce back from 1.1340 targeting 1.15-1.16 again in the near term. Before that some stability within 1.1420-1.1340 is possible.
The Euro-Yen (124.58) is looking bullish in the coming sessions towards 126-127 as indicated by the 3-day line charts. A fall towards 122.80 can be negated while the pair trades above 123.50. Near to medium term view is bearish.
Dollar Yen (109.33) has risen sharply on a rise in Nikkei. Both the equity index and Dollar-Yen look bullish for the near to medium term. Yen could weaken towards 110-111 levels soon.
Pound (1.2972) has risen sharply breaking above resistance at 1.2930. Now a rise towards 1.30/31 looks possible before a dip from there is seen. Near term is bullish before a fall from 1.31 is seen in the longer run.
Aussie (0.7194) has also moved up a bit possibly because of a rise in Copper. If copper continues to rise past 2.70, Aussie could also turn bullish towards 0.73 in the near term before falling back from there.
USD-CNY (6.7779) is nearing 6.80 as expected and could rise further towards 6.83 on a sustained rise above 6.80. Near to medium term looks bullish.
Dollar Rupee (71.0550) came off sharply from 71.40 itself, instead of moving higher towards 71.50/60. While a rise to 71.50/60 is on the cards, it could be delayed for now. Trade within 70.90-71.40 is possible in the next few sessions.
INTEREST RATES
Sharp rise in the US2Yr (2.57%, up from 2.52%), US 5Yr (2.57%, up from 2.51%) and US 10Yr (2.75%, up from 2.69%) over the last two days, perhaps mirroring the rise in the Dow. If so, some more upside could be possible in case the Dow happens to rise further towards 25000. And, also perhaps, profit-taking in the Dow could push yields lower?
As mentioned yesterday, the 30-10 Spread (0.32%) found Resistance at 0.35% and has come off a bit from there. The 30-5 Spread (0.50%) has also come off from 0.53%. Importantly, contrary to expectation, the dip has happened due to a rise in the 10Yr and 5Yr yields, rather than a dip in the 30Yr yield.
Central bank meetings coming up next week. BOJ on 23rd (Wed) and ECB on 24th (Thu). FOMC the week after, on 30th (Wed). Indian Budget on 1st Feb.
Resistance at 7.59% is holding for now on the 10Yr GOI (7.5487%). Maybe it comes down a little more ahead of the Budget? Let us see. A rise past 7.59% (if seen) takes it up to 7.70%.
