European Closing Thoughts: Grey area extension

We are going to publish the thoughts before the effective market close, the reason is in what we are seeing in the market today.

As we said in the MidSession Review we doubted the up-move, and looking at the market picture in US we were not wrong indeed:

• S&P500 Dec futures: -0.21% to 1420
• Nasdaq Dec futures: -0.34% to  2675.50
• Russell 2000 Dec futures: -0.86% to 818.7

Later in the day other data  highlighted a mixed picture as demand for U.S. factory goods rose in September by the most in over a year, while a gauge of business investment plans showed lackluster momentum in the recovery despite a slight upward revision.

Still this set of  data were unable to keep US equity markets afloat. Remembering that the US market has been the locomotive for European markets, you could probably conclude that European markets should be trading on their lows, your conclusion is wrong.

• DJ Stoxx50 Dec futures: +0.47% to 2542
• Dax Dec futures: +0.41% to  7363

European markets are telling us something? lack of short sellers? money put at work on the long side?

On the currency side the Euro trades 0.70% lower versus the greenback to 1.2851$, to multi-week low. Rising dollar is pressuring dollar denominated commodities such as Oil and Gold, both nosediving respectively -1.84% to 85.475$ a barrel and -1.81% to 1684.2$ an ounce. But Is it just the result of the greenback pressure?

At this point we are heading into the closing auction with European markets in divergence not only with the currency market but also with US equities, extending the borders of the grey area we are working on since yesterday close.

European closing auction is less than an hour away, keep an eye on it!

Have a great weekend.

Originally posted at www.77sigmatrading.com