![\"\"](\"http:\/\/www.fnarena.com\/ckfinder\/userfiles\/images\/SP500_50MA.jpg\")
<\/p>\n\n\tBy Rudi Filapek-Vandyck<\/p>\n
\n\tFollowing on from yesterday's story “Crude Oil The Gauge For Weakening Sentiment?” (see FNArena Technicals) -which couldn't have possibly been more accurate- we can now report that the overall news for risk assets doesn't seem to be getting any better.<\/p>\n
\n\tWell, not if market analysis by technical analysts at Barclays in London can be taken for gospel.<\/p>\n
\n\t<\/p>\n
\n\tIt would seem the analysts have been somewhat surprised by how quickly things have moved in negative direction this week. They note the S&P500 index has now rapidly reversed from its 100 moving average to right on top of its 50 moving average at the overnight close.<\/p>\n
\n\tWhy is this an important observation? Because in the past the 50 M\/A has often proved either a hard nut to crack (technical resistance) or it has provided the market with solid support.<\/p>\n
\n\tAlas for the optimists, the team's analysis regarding crude oil and gold do not suggest “solid support” will prove strong enough to withstand further weakness.<\/p>\n
\n\tIt's not all bad news though, with the analysts commenting “Given its recent importance, a break below [the 50 M\/A] would likely result in a further acceleration lower (and further pressure on risk assets) to the 1056, July 20 lows and potential the February\/May\/June lows in the 1044\/1040 area. However, this is likely the worst-case scenario before renewed basing and a subsequent turn higher”.<\/p>\n
\n\tDepending on the particular mindset of the reader this can be read as a glass half-empty or a glass half-full scenario.<\/p>\n
\n\tThe team maintains its view that gold is on its way to US$1180\/oz, with an “overshoot” to the downside seen as a key risk.<\/p>\n
\n\tFor crude oil things have simply turned worse. Yesterday, the team suggested WTI front month futures (expiration in September) were likely to revisit price levels of around US$79\/bbl. Today, the team believes this is likely to prove too optimistic.<\/p>\n
\n\tThe analysts now believe further falls towards US$73.93\/73.07\/bbl are more likely. This area represents the 78.6% retracement level and May\/July channel support.<\/p>\n","protected":false},"excerpt":{"rendered":"
If crude oil futures are showing the direction for global risk appetite, this week’s retreat has a lot further to go.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[24],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57044"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57044"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57044\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}