STOCKS
Overall global stock indices look bullish just now. While Dow could be poised for some more upmove in the coming sessions, Nikkei and Dax may possibly see a pause near current levels.
Dow (22956.96, +0.37%) is slowly rising and could move up towards 23000-23250 levels in the near term. Thereafter a small dip is possible towards current levels. Near term looks positive.
Dax (13003.70, +0.09%) has paused slightly just at the crucial resistance level and a sharp break above current levels is needed to initiate fresh bulls in the near to medium term. Else a corrective dip from here is possible, taking the index back towards 12800 levels.
Nikkei (21260.89, +0.03%) came off after testing 21400 on the upside. As mentioned yesterday, Nikkei looks overbought and a slight correction from here is preferred which could take the price down towards 21100 or lower. A failure to stop at 21400 (if seen) may take it higher to 21500/600 in the near term.
Shanghai (3372.73, -0.17%) has some scope of testing 3350/60 on the downside before re-attempting a rise towards 3410.
Nifty (10230.85, +0.62%) looks positive this week and could move up towards 10300/10 levels if the bulls continue to remain strong. Near term looks bullish.
COMMODITIES
Gold (1293.38) has come off as expected. While 1308 holds, the price could test 1280 before again rising back in the medium term.
Silver (17.20) is likely to test 17 before again bouncing back towards 17.35/40 again in the medium term. For now some sideways movement within 17.00-17.50 is preferred.
Brent (57.83) and WTI (51.81) are almost stable near levels seen yesterday. Both made an intra-day high yesterday to 58.47 and 52.37 respectively but came off to close at lower levels. There is some scope that the prices may move up in the near term towards 59 and 53 respectively.
Copper (3.2315) has moved up sharply to test immediate resistance levels seen on the line charts. A rejection from these levels looks possible in the next few sessions towards 3.15/10. Else a rise to 3.30/35 is likely before a sharp corrective fall is seen.
FOREX
Although we are bullish on the Euro (1.1780) in the longer term, with Support at 1.1730, we also notice possibilities of a Bear Shoulder-Head-Shoulder developing. A break/ close below 1.1700 could negate the bullish prospect.
We prefer bullishness on the Euro because the Dollar Index (93.35) may have Resistance between current levels and 93.50.
But, there are warning signs coming from Euro-Yen (132.05) which could be breaking its uptrend and from the German-US 10Yr Spread (-1.93%), which is trading below its earlier support trendline. Also, US yields have moved up (see Interest Rates below). So, we need to be careful about our current bullishness on the Euro.
Dollar-Yen (112.09) looks mixed/ bullish. The Pound (1.3258) has slipped a bit since yesterday and so has the Aussie (0.7850).
Dollar-Rupee (64.74/75) might start moving up soon, even though the NDF shows 64.70/74.
INTEREST RATES
Contrary to expectation, US Bond yields (5yr 1.96%, 10Yr 2.31% and 30Yr 2.82%) have moved up yesterday instead of coming down towards 1.81%, 2.21% and 2.72% respectively.
The US Yield Curve itself has flattened quite a bit, with a dramatic decline in the 10-5 Spread from 0.41% on 3rd Oct to 0.35% now. The 30-5 (0.87%) continues to be in a long-term downtrend that could potentially target 0.75%.
German Yields (5Yr -0.34% and 10Yr 0.37%) could have Supports here, but they seem to be rising slower than US yields.
In India too, we may see the Indo-US 10r Spread (4.4541%) come down.
