"change"

Over the years the U.S has become the number one financial leader, affecting global economies by leading them in and out of recessions. The mass volume that exchanges hands per day has increased the U.S’s popularity, as names like NASDAQ, Dow Jones and S&P are now known by people across the globe. In addition, due to globalization and the fast development of the Internet, bringing the ends of the world closer together, financial information and trading markets have become accessible for whoever wishes to use them. With the click of a mouse, investors from across the globe can be a part of the daily volume in the U.S, affecting market trends.
Looking back one year ago, one can see that euphoria was felt throughout the financial world. Traders and investors on various exchanges were positive that stocks could only go in one direction – UP. Even top analysts anticipating a market correction were shocked to see the depth of the current one, as the major indices took a nose dive, erasing 5 years worth of gains. Some of those companies giving market analyses are no longer with us today, due to bankruptcy. Leaders like Lehman Bros., Citigroup and other investment firms have either vanished into the distance or are now on the edge of their cliff, due to poor management practices. Since the beginning of 2007 the global markets have restructured; companies have been nationalized, while others have been bought at discount prices. The change in sentiment has spread from the U.S to the various global economies sending all the financial markets into mayhem. Anything that was linked to the U.S mess (subprime) has received a blow, as money is now being wiped out through write-offs. Central banks have tried to confront the situation with monetary measures but their actions have also affected the various tradable markets, as these once to be thought orderly markets have become a trader’s nightmare.
“Change We Need” – Those are the words now heard throughout the U.S as Americans hope for a better future, currently dealing with a dire economy last seen during the 1930’s. In less than one year, unemployment has reached unbearable levels (6.5%) while growth has deteriorated as companies have stopped their productions due to the lack of consumption. The slowing demand has spread across the globe, bringing down prices of raw materials, affecting inflation levels directly and indirectly. Industry giants have collapsed and workers are being fired left, right and center.
“Further downside risks”, “A further slowdown” and “economic problems”- those are just a few of the words mentioned by officials recently, as the markets continue to plunge. The lack of work and a pessimistic future have forced citizens to grab whatever opportunities they can find, allocating the majority of the money to savings, while waiting for better times.  The financial markets have become panic driven despite excessive efforts to recuperate from the situation.
Even though the new elected president has stressed that he has numerous plans; including monetary and fiscal ones; creating new jobs, the main question is;
will Obama be able to deliver the goods and provide the change that citizens really need, reviving a bullish market?

Market analysis
Support of one month failed to hold this week as stocks plummeted to lower levels. Even though the charts are showing slight divergence relevant to price patterns, Friday’s rally could end up being only a “test candle” if this week’s news doesn’t improve market sentiment. The Dow index industrial average retraced all of Thursday’s gains, closing Friday’s session above critical levels of 80 points.
Volatility is trading around October’s highs, also showing divergence, which could lead to a double top formation on the VIX, if the index fails to break resistance.
When looking at the Dollar index one can see that despite its massive rally, the Dollar is now fighting for new ground. After gaining with increased momentum the Dollar index is now creeping higher, still trying to push through the 88 level. In addition, when analyzing the currencies in more depth one can see that despite the break of support on the S&P last week, the Dollar failed to gain the same relative strength – something that we have been witnessing frequently lately as the Dollar has been classed as a safe-haven. Over the last couple of weeks a drop in stocks has been correlated by an increase in the Dollars price.
Conclusion
Despite recent breaks on indices, Friday’s candles showed that buyers are still in the market. While charts are showing slight divergence, technical analysis shouldn’t be solemnly used, as current markets are being driven by news headlines. The EURO is holding ground similar to other currencies against the USD as momentum has decreased on Dollar purchasing on particular pairs. Next week’s economic calendar is filled with important news ranging from unemployment to growth data from various economies. While securities seem to be forming excellent entry points, upcoming data could paint a slightly different picture (see attached charts below)
Technical Charts
DJX- Daily chart

*courtesy of stockcharts.com

Volatility Index- Daily Chart

*courtesy of stockcharts.com
Dollar Index- Daily Chart

*courtesy of stockcharts.com
EUR/USD-Daily Chart

*courtesy of netdania.com
USD/CAD-Daily Chart

*courtesy of netdania.com
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