US indices Continue To Suffer Losses on bed corporative news
Wall Street traded in negative territory, after scoring an early rally caused by enthusiasm about the 586 billion dollars Chinese stimulus package. Initially the market responded positively, because that package might support multinational companies with Business in China such as General Electric Co. and Caterpillar Inc. Despite that the stimulus itself will likely have only a limited effect in the United States. The market turned around as investors worried about the health of the companies. The troubled AIG got more money from the U.S. government and electronics retailer Circuit City Stores Inc. filed for bankruptcy protection. Circuit City filed for bankruptcy protection about a week after it said it would close 20 % of its stores. The electronics retailer, has been struggling as consumers spend less and credit has become tighter. Shares sank 56 % to 11 cents. Meanwhile, the US government announced it would invest 40 billion dollars in AIG, which also reported a nearly 25 billion dollars third-quarter loss. AIG, which got a bailout in September, has so far received a total of 150 billion dollars in government aid. The government's investment helped the insurer's stock rise 19 % to 2.53 dollars a share.
TECHNICAL OVERVIEW
S&P 500 – USA
The short term picture is neutral as the index remains between the key resistance level at 5240, which is 38.2% retracement of the 7229-4012 drop and the support levels of 23.6 % retracement of same movement at 4770. So far if this level be broken successfully, next targets will be the supports at 4500 and 4300. If the upward movement is resumed, on the upside resistance is seen at 5240, followed by 5620, which is 50% retracement of the mentioned drop. Although the oscillators indicate a bullish divergence, which is a possible signal that a mid-term bottom has been reached, it’s too early to consider that the uptrend has resumed until the index stays below 6000 and we may witness more downward movements.
S&P 500 – USA (chart, table)
DAX 30 – Germany
The short term picture worsens significantly as the key resistance level at 5240, which is 38.2% retracement of the 7229-4012 drop, pushed DAX sharply lower. So far the main goal of the index is the support at 4770 which is 23.6% retracement of the mentioned drop, and if broken successfully, next targets will be the supports at 4500 and 4300. If the upward movement is resumed, on the upside resistance is seen at 4920, followed by the key 5300 and 5620, which is 50% retracement of the mentioned drop. Although the oscillators indicate a bullish divergence, which is a possible signal that a mid-term bottom has been reached, it’s too early to consider that the uptrend has resumed until the index stays below 6000 and we may witness more downward movements.
DAX 30 – Germany (chart, table)
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07.11.2008 Stock Market Daily report.pdf, 488 Kb
