StockTwits Market Preview 6/15/09

• kileyay
• June 15th, 2009

Overseas

Futures are down following a widespread retreat in world stocks.

Asian shares pulled back from the eight-month highs reached last week. Hong Kong’s Hang Seng shed 2.1%, and Singapore’s Strait Times edged 0.2% lower. The Nikkei 225 declined 1% but held the important 10,000 level.

The UK’s FTSE 100 is down 1.5%, Germany DAX off nearly 2%, and France’s CAC-40 down 1.9%.

In focus was the meeting of G8 finance ministers held over the weekend. They acknowledged “signs of stabilization in our economies” but noted that “the situation remains uncertain and significant risks remain.”

Commodities

The G8 finance ministers’ statement revealed explicit concern over commodities trading: “Excess volatility of commodity prices poses risks to growth. We will consider ways to improve the functioning and transparency of global commodity markets.”

Some saw the statement as a thinly veiled threat aimed at traders profiting from swelling prices.

Commodities look weak this morning. Energy and mining sectors dragged down overseas markets.  WTI crude oil price is hovering around $71.50 per barrel. Precious metals are all trading lower.

Dollar

Upbeat comments expressing confidence in the dollar from G8 ministers have breathed some life into the greenback.

As commodity prices headed lower, the dollar recovered. The Euro weakened to 1.3842 from 1.3995 late Friday. The pound was down to 1.6342 from 1.6436. The dollar also strengthened to 98.28 against the yen.

Oil and gold pullbacks will continue to help the dollar, as fears of inflation wane and trust in the global reserve currency rebounds. Expect hesitancy leading up to the Federal Reserve policy meeting June 23-24.

Treasuries

Rising interest rates are still in the spotlight. The 10-year Treasury bond now yields 3.76%–up from less than 3% three months ago–largely on fears that Fed policies will lead to inflation.

The Treasury Department will release Treasury International Capital (TIC) data on Monday. Tracking the flow of money across U.S. borders, it includes data on foreign demand for government debt.

Technicals

Consolidation on the major indices continues. We are lodged between the 20 and 200 day exponential moving averages. (On the S&P, that’s between 924 and 944.)

Technical analysis says there’s a big move coming. With a rising 20 DMA, the bulls have the edge. But don’t discount the power of bearish fundamentals to push this thing south.

StockTwits Sentiment

The results of the StockTwits’ weekend Bull Bear Survey show the community is wary of a breakdown. Don’t forget to vote next week.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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