Saturday, November 5. 11:30 a.m.
Prime Minister Papandreou narrowly survived the confidence vote in the Greek parliament last night, concern over which had global markets back to the downside yesterday after the big rallies of Wednesday and Thursday.
He did so by agreeing to resign in four months, while in the meantime immediately launching an effort to form a coalition government that will include the opposition parties, and assuring that he is committed to accepting the eurozone bailout deal and having Greece remain in the eurozone.
Meanwhile, concerns had been swinging to Italy as next in line, particularly if Greece failed to agree to the bailout and defaulted on its debt.
And in Italy, Prime Minister Berlusconi, also fighting for his political survival, said he has refused the offer of a low-interest rate loan from the International Monetary Fund, saying his country doesn’t need one at this point. But he did accept very intensive monitoring of his government’s progress on promised reforms.
That seems to satisfy the IMF and EU, at least for now. They believe Italy’s reform measures will improve its economy and debt crisis, but are concerned about doubts in markets that Berlusconi is able to implement them. The hope is that sending IMF and EU monitors to Italy to closely monitor progress will relieve the recent panic in Italian bonds, and assure markets that Italy will make it through its debt crisis.
To read my weekend newspaper column ‘The Entire Global Economy Is At the Mercy of Tiny Greece?’ click here!A quick look at a few global markets .
France. Is that a potential short-term reverse head and shoulders bottom forming? Or will the retest of support at the 50-day m.a. fail?
To demonstrate the often important difference between short-term charts and intermediate-term charts:
Most investors tend to look only at charts based on the daily closes.
The short-term chart above shows the World Ex USA index potentially finding support at its short-term 50-day m.a.
But the following intermediate-term chart shows it potentially failing at the resistance at its 20-week m.a., keeping it in the usually negative lower-half of intermediate-term Bollinger Bands.
A considerable difference between the short-term and intermediate-term appearances.
But both are bare charts without the technical indicators that provide short-term and intermediate-term signals.
Subscribers to Street Smart Report: There is an in-depth ‘U.S. Market Signals and Outlook report’ and a hotline from Wednesday evening in the subscribers’ area of the Street Smart Report website, and the next issue of the newsletter will be out next Wednesday.Yesterday in the U.S. Market.
A negative day, no follow through to Wednesday’s and Thursday’s big rally days, as concerns about the Greece bailout returned. But the market recovered to close well off its mid-day lows when the Dow was down 195 points. Volume was light, with only 0.9 billion shares traded on the NYSE.
The Dow closed down 61 points, or 0.5%. The S&P 500 closed down 0.6%. The NYSE Composite closed down 0.7%. The Nasdaq closed down 0.4%. The Nasdaq 100 closed down 0.5%. The Russell 2000 closed down 0.7%. The DJ Transportation Avg. closed down 0.4%. The DJ Utilities Avg closed down 0.5%.
Gold closed down $6 an ounce at $1,755 an ounce.
Oil closed up $0.30 a barrel at $94.36.
The U.S. dollar etf UUP closed up 0.3%.
The U.S. Treasury bond etf TLT closed up 0.1%.Yesterday in European Markets.
European markets closed down yesterday in reaction to the Greek Prime Minister calling for a parliamentary vote of confidence in his leadership for Friday night. The London FTSE closed down only 0.3%. But the German DAX closed down 2.7%. And France’s CAC closed down 2.3%.Global markets for the week.
A negative week, no follow through to last week’s big rally, as doubts about the eurozone rescue plan returned.
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Next week’s Economic Reports:
Next week will see very few important potential market-moving economic reports, almost none. To see the schedule of the week’s reports click here, and look at the left side of the page it takes you to.
To read my weekend newspaper column ‘The Entire Global Economy Is At the Mercy of Tiny Greece?’ click here!
Subscribers to Street Smart Report: There is an in-depth ‘U.S. Market Signals and Outlook report’ and a hotline from Wednesday evening in the subscribers’ area of the Street Smart Report website, and the next issue of the newsletter will be out next Wednesday.
I’ll be back with the next regular blog post on Tuesday morning at 9:25 a.m. Have a great weekend!
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