daytrades nov 24 pre-market, page-2

Thanks HLL.

Another kick off the ascending trendline for the DOW bouncing almost 50 points off the low at the close. The question many will be asking themselves now is will it stay above it? The daily stochastic is not quite in oversold yet either.

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http://www.businessspectator.com.au/bs.nsf/Article/US-STOCKS-Korea-tensions-weigh-on-futures-GDP-data-BGHB2?OpenDocument&src=hp1

Reuters

NEW YORK - US stocks tumbled as investors dumped risky assets on escalating tensions in the Korean peninsula and as euro-zone debt worries mounted.

South Korea warned North Korea of "enormous retaliation" if it took more aggressive steps after Pyongyang fired scores of artillery shells at a South Korean island, in one of the heaviest attacks on its neighbour since the Korean War ended in 1953. The iShares MSCI South Korea Index Fund fell 5.4 per cent.

Global stock markets fell, while the search for relative safety sent the US dollar index up 1.2 per cent and gold rose 1.6 per cent to $US1,380.10 an ounce.

The energy sector of the S&P 500 carried the most losses, down 2.2 per cent as US oil futures prices fell 0.6 per cent to settle at $US81.27 a barrel. Oil giants Chevron and Exxon Mobil, each down more than 2 per cent, accounted for 15 per cent of the drop in the Dow industrials.

"The market is obviously not taking the Korean news very well," said Ralph A. Fogel, investment strategist at wealth management and advisory firm Fogel Neale Partners in New York.

"Equities never like political uncertainties, especially because it is hard to quantify what they mean."

The CBOE Volatility Index, Wall Street's fear gauge, shot up 14.4 per cent to 21.01 in its largest daily per centage gain since late June.

The Dow Jones industrial average dropped 170.02 points, or 1.52 per cent, to 11,008.63. The Standard & Poor's 500 fell 19.05 points, or 1.59 per cent, to 1,178.79. The Nasdaq Composite lost 41.19 points, or 1.63 per cent, to 2,490.83.

The S&P 500 has found strong support around the 1,175 area. The 23.6 per cent retracement of the index's 2010 low-to-high gain, last week's low and the 50-day moving average all coincide near that area.

Market reaction was muted to minutes from the Federal Reserve's policy-making panel that showed the FOMC considered even more drastic options to stimulate the economy before it settled on buying $US600 billion in bonds in a second round of quantitative easing, known as QE2..

Fed officials revised down their forecasts for economic growth next year, and saw unemployment at higher levels than they had the last time they issued official forecasts in June.

Data earlier showed the US economy grew faster than previously estimated in the third quarter, but a slump in sales of previously owned homes in October indicated the recovery remains too anemic to reduce high unemployment.


DJIA Daily chart



XJO daily

How much of last nights fall in the US was priced into yesterday is the question? I think plenty and we will see a panic sell followed by a recovery today?




USD Daily chart with daily stochastic

Big breakout here last night a negative for equities.




USD - Monthly chart with monthly stochastic

I was taking a look at the monthly USD chart and found it interesting. If the recent trend continues the equity markets could be in for some pain. Below is a 20 year chart. Look what happened the last time the price bounced off the bottom ascending trendline in Jan this year.



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