By Dominic Picarda, 20 February 2012
EQUITY INDICES
In immediate aftermath of a bomb-blast or train-wreck, the emergency services attach labels to victims, to distinguish the treatable from the dying or soon-to-be dead. The European Union is stubbornly refusing to adopt this hard-headed approach, and is busily expending resources on trying to maintain Greece’s vital signs, despite the nation being mangled beyond repair. In due course, the Eurozone will rue having devoted so many tens of billions to this lost cause, but that’s a story for another day.
For now, investors are once again cheering the likelihood of a second rescue attempt for Greece, alongside the latest shot of adrenaline into the Chinese economy. The indices have broken higher overnight, overcoming the top of their recent range nicely. I expect this move to continue for a bit longer yet and am looking to enter on intraday pullbacks. The S&P and DAX are especially interesting to me just now, but I might even give the FTSE the benefit of the doubt.
Click here for analysis of some leading equity indices.
COMMODITIES
Black gold is still where the action is right now. Crude is in a handsome uptrend, especially compared to the likes of copper, which remains weak. The worrying outlook over Iran is surely the main factor here, rather than economic optimism. I think a return to last year’s highs and perhaps more could be on the cards in this environment. Were Brent to go significantly higher, of course, it would likely have its customary recessionary effects on a still-fragile economic recovery. My concern right now, though, is trying to ride this uptrend, and I’m looking for an intraday pullback to get long.
Seasonal factors are strongly positive over the coming couple of weeks, as shown by the blue line at the bottom of the accompanying chart.
Click here for analysis of some leading commodities.
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