As discussed on my previous post, the world is not a perfect place on a fundamental basis, in light of improving economic figures out of the UK & Eurozone. Reality will come to light & sink in eventually.
As noted earlier, Europe & the UK are starting to face an issue with inflation. The UK wants to keep inflation in check at least above 2%. Per the inflation report released over night, it is currently above 2%, but is lower than has been. They are expecting it to dip below 2% in 2 years.
Another place to keep an eye on is China, who released a slate of numbers last night showing their economy is softening as well. Inflation met expectations, but still declining & expects to do so as early as this year. Retail sales, new loan lending, and money supply also decreased. Overall economic growth slowed to 10.3%, from 11.9%, still, expecting to grow by 9% at year’s end. Housing prices are increasing less (10.3% year-on-year in July, down from 11.4%). Exports are in a decline (increase 38.1% year-on-year in July, from 43.9% year-on-year in June).
On to a few charts, to get an idea of what has occurred past couple of days & what maybe ahead. Below is the S&P e-mini, where we broke a trendline & woke up this morning below the 50 fib level (2010 high/low). Next area of note on the downside is the 38.2, 1084.11.
Below is the US Dollar Index. Note there is a double bottom on the daily at the 80.20 area. The next path to resistance is in the 82.20s.
The US equity marker opens in less than 2 hours. Economic releases includes trade balance out of the US & Canada at 8:30 & crude oil inventories at 10:30. Happy trading!