It would surely seem like we’re pulling all the stops, allowing a few pre-weekend celebrations to pass the tables, and generally be in a “good-run” mood as the resolution to the immediate problem in the Greek debt saga seems to come to an end, and we can slowly move towards the next one. If only the politicians could have it as easy as Sisyphus… German industrial production numbers seems to have helped European stocks higher momentarily. Strange, orders goes down yesterday and we look at industrial production, and no one scratches their head on the market rallying?
Markets are up significantly in pretty much everything normally associated with risk, all but neutralizing the effects of the sell-off on Tuesday in Europe, and Asian risk was running good as well. The Nikkei 225 futures are right back to their 2012 highs (9 865, +3%! on the day), and US futures are going great with the Dow at 12 950 and S&P500 at 1 365! The euro is clearly above US$1.32 and we get pretty great signals all over with the yen also falling significantly (which contributed to the Nikkei outperformance beyond the upwards GDP revision, no doubt) and gold parking above US$1 700/oz. (+1%) Silver enjoys the high-beta play as well, outperforming, but platinum is marginally lagging behind.
The Hang Seng Index did not perform in absolute numbers, but what it was missing in performance it made up for in potential play layups on the index side, and it’s the subject of another post to delve into the individual shares.
The HSI itself broke the 252 SMA – which pretty much half of Hong Kong’s technical traders are looking at after the AAstocks front page barrage – after spending pretty much the entire day rejecting higher from the VWAP on any chance it got after 10 am. It had an early afternoon challenge to 20 840, the Tuesday close, after retreating to VWAP to fish for new buyers, and then mounting a pretty solid run which got a lot of steam after additional volume was added after the 20 840 cross to close a quarter of a point above 20 900 after just leaving a weak hook at 20 885 (252 SMA). Given the extensive rallies in all risk assets we’re seeing out in force now, especially on German industrial production, more central bank discussions, and of course the final inking of whatever will happen in Greece – all events which at the moment seems to leave room for positive surprises and re-risking pressures – a print of HSI 21 200 – 21 400 tomorrow does not seem outlandish. There is still the strong rejection around the 21 800 levels to worry about, but should we actually get a more apparently permanent fix of the Greek issue, all seems fine for now in current market mentality. Also: hopes and projections for the next nonfarm payroll number out from the US tomorrow will set the tone for pre-weekend trading, assuming there is a single trader that shows up sober.