Market Volatility is easing, with the CBOE Volatility Index having broken 30. Follow-through below 24 would confirm the down-trend.
Report Shows Gain in Jobs but Growth Still Sluggish – NYTimes.com
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.
European Central Bank makes surprise rate cut – World – CBC News
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.
Greece’s Government Teeters – WSJ.com
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.
Canadian Loonie
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
Japanese yen
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
Euro falters upset sterling
The euro retreated below $1.40 and is now consolidating at $1.36. Failure of medium-term support would test the primary level at $1.32. In the long-term, breach of $1.32 (if the Greeks vote “No”) would offer a target of $1.22*. 63-Day Twiggs Momentum holding below the zero line suggests continuation of the primary down-trend.
* Target calculation: 1.32 – (1.42 – 1.32 ) = 1.22
63-Day Twiggs Momentum similarly suggests continuation of the primary down-trend for the Pound. Breach of primary support at $1.53 would confirm, offering a target of $1.46*.
* Target calculation: 1.53 – ( 1.60 – 1.53 ) = 1.46
Kiwi Dollar
The Kiwi respected the band of resistance at $0.80/$0.82 against the greenback, warning of a primary decline. Earlier breach of the rising trendline strengthens the signal. Failure of support at $0.75 would offer a target of $0.70.
* Target calculation: 0.75 – ( 0.80 – 0.75 ) = 0.70
Aussie Dollar
The Aussie Dollar is headed for a test of support at $1.01/$1.00. Recovery above $1.08 would complete an inverted head and shoulders, but there is still some way to go. Breach of support would warn of another primary decline. In the long-term, failure of support at $0.94 would offer a target of $0.80, while breakout above $1.08 would indicate a target of $1.22.
* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80
Falling Treasury yields warn of money flowing out of stocks
10-Year Treasury Yields are testing medium-term support at 2.00 percent. Failure would indicate another primary decline — and bad news for stocks.
