The rallies Wednesday and Thursday happened on false premises. ASIA has not reacted to that, maybe Europe and the U.S. will
Fiscal cliff talks turn sour: US talks to avert the fiscal cliff turned sour after Republicans in Congress rejected what they dubbed a “completely unbalanced and unreasonable” offer from the White House in a round of meetings on Capitol Hill. One Republican aide in the House of Representatives said Tim Geithner presented a plan over the decade for $1.6tn in tax increases, $400bn in spending cuts, at least $50bn in new stimulus and a “permanent” lift in the US borrowing limit. The bid by the White House closely tracks its 2013 budget proposal, meaning Barack Obama has so far been unwilling to make any major concessions. Republicans believe the tax increases are too high and the spending reductions are too few. (Financial Times)
DOW is sideways now and will likely end today sideways or up giving December trading a neutral technical start unless no big news happens.
Dow's trend is sideways with the strong 21 MA up below the trend holding this direction until close in US. The trading can only continue sideways or go higher as it looks right now today Friday, the last day of the month and week. The monthly and weekly closes will come in at points which will make these two long trends starting December in a neutral long term situation. All this said unless big news happens. SP500 and NAS are moving the same way.
The first big Fiscal Cliff rally on rumors started a power full rally just after 16:00 when the market had sold off on bad housing news. Short trades had to be covered all the way back to the top of the trend. Now we must be cautioned about any positive talk about the Cliff in the future. Europes problems are solved for a few months so I expect this to be the new dark horse. To me it seems afterwards as if this was planned by the big money. The Asian indexes made high jumps with big gaps which are still holding 03:00. I think we have to wait until lunchtime in Europe before eventually the markets are back to normal. The daily weekly and monthly trends are still in place so no technical damage there so far.
FTSE 250 is beeing pushed down by 8 MA. Watch up for a fall by this Britain's strongest index for years
The yen has been down for years but the last several months a bottom has been built and in September the final low was taken, see the chart. Since then an uptrend has started in 5 waves telling me that a longer uptrend is probable, but first a correction must occur. The daily 8 MA is down so a test of the sharply rising 21 and 34 MA:s could be the target for a correction and a buying opportunity.