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Stock Markets Stalling as Month, Quarter Draw to a Close

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October 1, 2012 By: , No Comments

Global stock markets are trading back near their weekly lows on Friday, reversing the attempted rallies during the previous session, ahead of consumer activity data out of the US this morning. This latest pullback looks to be coming as a result of end of month, end of quarter position squaring as September draws to a close. The latest volatility is not a complete surprise, given that some investors will be looking to book profits after yesterday’s rallies, which were fueled by signs of improvement in the US labor market and continued analyst expectations of monetary stimulus that could be seen in China. Expect this volatility to remain choppy into the end of the Friday session, as shorter term, intraday positions are erratically influenced by the latest quarterly position squaring.

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Technical Perspective

The S&P 500 is starting to stall into the end of the week, with prices now pressuring support in the 1420 region. If prices to manage to break and close below this level on a daily basis, the short term bias is downward, with the next target seen at 1392. This is where the 100 day EMA, historical support from the end of August and the lower Bollinger Band come into play but given the longer term positive momentum, this area can be seen as the first buy zone sub-1400 to target another test of the highs above 1470.

Richard.Cox

About Richard Cox

University Teacher in International Trade and Finance. Specialty in technical/fundamental analysis of the commodities and currencies markets.

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