bassko

Morning Briefing – 07-Sept-2011 GOOD MORNING! EQUITIES The US markets which opened after a long weekend, fell sharply yesterday and had closed lower although they managed to bounce back well from their intraday lows. Dow ( 11139.30, down 0.9%) and the Nasdaq (2473.83, down 0.26%) bounced back from their respective lows of 10932.53 and 2414.31 to close lower for the day. A day close below 11000 on the Dow will be very bad for the market. Contrarily the Asian markets are trading higher today. Reports say that the Asian markets are up following the short covering after three consecutive days of loss. Nikkei (8714.59) is up 1.44% and the Shanghai (2477.67) is up 0.29%. The Sensex (16862.30, up 149.48 points) and Nifty (5064.30, up 47.10 points) had closed higher yesterday and has good chances of extending the gains following the rise in other Asian markets. COMMODITIES Nymex Crude (86.37) had bounced back well from its low of 83.20 following the threat of a storm in the Gulf of Mexico and expectation that the EIA's data release today would show a drop in US Crude inventories. It will have to be seen whether it can see a strong rise past 88. Gold (1874.80) failed to sustain above 1900 and fell sharply from its high of 1920.70 to a low of 1842. It has bounced back from its low and can test 1900-20 once again. Silver (42.00) fell from its high of 43.45 and could be ranged between 41 and 44 for some time. Copper (4.07) is trading flat near its important Support at 4.00 and we will have to wait and watch what happens to this Support at 4.00. CURRENCIES The SNB's move to fix the floor for Euro-Swiss at 1.2000 created extreme volatility in the markets yesterday. Dollar-Swiss (0.8585) saw a sharp 10% rise after the news and it is trading strong just below 0.8600. It can rise further to 0.8800-50 if it can retain this momentum. Euro (1.4029) tanked from its high of 1.4281 to test its important Support at 1.4000 and is trying to bounce back from there. The broader picture remains bearish, but it has important Support in 1.4000-3960 region which might hold. Dollar-Yen (77.40) has risen well above 77 and it can test 78.00-30 in the coming sessions/days. The Euro-Yen Cross (108.60) failed rise past 110 yesterday, but it is finding Support at 108. Might be ranged between 108-110 for some time. The Pound (1.5972) fell sharply breaking below 1.6000 and has bounced back from 1.5921. Important Support is seen in 1.5900-5800 region, a test of which is possible while below its 1.6000-50 Resistance region. Aussie (1.0575) has risen well from its low of 1.0482 as the Q2 GDP data release today which showed the economy grew at 1.2% as against the expectation of 1%. The Asian currencies are trading strong as compared to yesterday. The Korean-Won is trading near 1072. The Resistance at 1.2115 on the USD-SGD mentioned yesterday has held well and it has come off from its high of 1.2123. The Sing Dollar is trading near 1.2085 now. Dollar-Rupee had closed higher yesterday at 46.11/12 and is keeping the broader bullish view intact. It has good chances of testing its Resistance at 46.20 and the movement there after needs to be watched. Regards Konrad