Opening salvo; This weeks market space.
Market space opening salvo
Weaker Indices within euro area feature risk model levels near or close to forecast market risk lines in both continuous and discrete forms, most notable Italy´s FTSE MIB, Spain’s IBEX 35 Index and France CAC 40. These particular markets have been active within the outlier / market risk spread.
Fairing better are London’s FTSE 100, Frankfurt’s DAX 30 and the Swiss Market Index which are all trading inside their lower channels with measures of central tendency above as a capping target. The divergence of position in the market spaces quite clearly highlighting Investors and traders preferences. The United States S&P 500 continues to trade above its own calculated market neutral at 1186 whilst the DJIA displays dynamics of what we would call a “normal” market in happier times trading just below the expected measure of central tendency (CT) in its life time models.
Oil flavours WTI and Brent reacted exactly as expected as we called a few weeks ago at the given risk level. The low risk criteria bring on sharp bids and then continuing the march. Both are now closing in on their monthly CT targets rapidly the 1:1 RR forming the base of the last leg and we are assuming the foundation support until CT is met at which point the path will have completed and a new rotation would begin.
Gold and Silver
Gold is presenting a usable risk profile currently although not ideal. Much more usable in risk profiling is the spot Silver XAGUSD market space which has supported itself at Level 1, a risk exists for local time frames in the form of an outlier event adjusted calculation at 22.90. Although not expected, we would not be surprised if action did find level prior to growth into its expected price especially on an event risk.
EURUSD remained in our featured risk profiles last week and we continue to view the currency pair as weak until we are provided evidence that supports the likelihood of at least some retracement. Failing a retracement we would then return to our January targeting (see videos).
GBPUSD has bounced between 1:1 risk on and CT since August 2010 and continues to rotate on our cycle models with relatively predictable parameters. Current action finds us 50% neutral of this cylindrical pattern.
AUDUSD capped on cue as price retraces its February drop on rounds of RBA interest rate cuts and China data flows.