The similarity between the current weekly chart and 2008 continues.
The index is now retracing to test support at 1220, in a similar fashion to support at 1380 in 2008. Failure of support would be a strong bear signal, but confirmation would only come if primary support at 1100 is broken.
* Target calculation: 1100 – ( 1300 – 1100 ) = 900
Conservative daily Die Welt writes:
“At the end of the eventful day, the redemptive message came: Papandreou would withdraw his referendum because conservative Greek opposition leader Antonis Samaras declared he was ready to vote for the aid package with the government and take part in an interim national unity government……”
“But the reasons behind this welcome development did not lie in Athens, but in Cannes. There, Merkel and Sarkozy bet the house when they took the Greek prime minister to task. They didn’t just say that payments to Greece would stop until the Greeks made it clear they would hold up their end of the bargain. They also insisted that the Greek referendum would essentially be a vote on Greece’s membership in the euro zone — the really big question. The politicians in Athens decided they’d rather not take the risk.”
A former vice president of the European Central Bank has emerged as an early favorite to lead what could become a new Greek caretaker government of technical experts that would finalize aid talks and stabilize the country’s fractured politics. The interim government would oversee the transition until possible new elections next year.
Officials from the country’s two leading political parties said Lucas Papademos keeps coming up as political insiders consider candidates for a prime minister of a transitional national unity government, if Prime Minister George Papandreou resigns, a possibility that is now widely expected.
[Greek Prime Minister] Mr. Papandreou was under intense pressure from his own Socialist party and the center-right opposition to step aside if his government survived the confidence vote [early Saturday], to pave the way for a unity government or early elections.
…….. New Democracy [the opposition] has refused to consider talks on a transitional government unless Mr. Papandreou resigns.
via Worried Eyes on Greece Ahead of Confidence – NYTimes.com.
Market Volatility is easing, with the CBOE Volatility Index having broken 30. Follow-through below 24 would confirm the down-trend.
The United States economy created a modest number of jobs in October, the Labor Department reported Friday. Employers added 80,000 payroll positions on net, slightly less than what economists had expected. That compares to 158,000 jobs in September, a month when the figure was helped by the return of 45,000 Verizon workers who had been on strike………
The unemployment rate was 9 percent in October, slightly lower than September’s 9.1 percent but little changed from where it has been for the last seven months.
via Report Shows Gain in Jobs but Growth Still Sluggish – NYTimes.com.
The European Central Bank has cut interest rates by a quarter percentage point under new head Mario Draghi to boost weakening growth in a eurozone struggling with a crisis over too much government debt. The move, which comes earlier than expected by many economists, takes the bank’s benchmark rate to 1.25 per cent.
European growth is expected to slow to near or below zero in the last three months of the year.
via European Central Bank makes surprise rate cut – World – CBC News.
Amid rising speculation he will have to resign his post, Mr. Papandreou’s overture to the center-right New Democracy party [to drop referendum plans if they can secure broad support for a new loan agreement and austerity measures] was a clear sign the prime minister and his Pasok socialist party no longer had the political clout to impose increasing financial hardships on its people to comply with aid conditions. Political insiders now predict a coalition as caretaker government to complete aid talks, followed by snap elections early next year.
The Loonie pulled back to test support at $0.975 against the greenback. Failure would re-test the primary level at $0.94. 63-Day Twiggs Momentum holding below zero suggests continuation of the primary down-trend. Breakout above $1.01 is unlikely — unless we see a similar breakout on the CRB Commodities Index.
* Target calculation: 0.94 – ( 1.01 – 0.94 ) = 0.87
The Bank of Japan is taking measures to suppress the yen against the greenback. The long-term chart shows why their efforts are destined to fail: the dollar has maintained a strong down-trend against the yen for a number of years. Failure of support at ¥76 would indicate that the BOJ’s latest efforts have failed and will offer a target of 72*.
* Target calculation: 76 – ( 80 – 76 ) = 72
