by Chris Becker
US traders returned after Thanksgiving to a Black Friday with a very mixed macro picture as better than expected confidence in Europe flies in the face of another expected rate cut from the ECB, while simultaneously the case builds for a rate rise by the Fed. Chinese stocks collapsed on Friday as emerging market stocks continue to fall, sending warning signs that the global growth engine is running out of fuel. Bonds were flat as a tack with European issues bid slightly while Treasuries mark time. Commodities slumped again although copper was an anomaly, as the weekly downtrend remains intact as the bear market continues to build.
Recapping Asia’s Friday, where the Shanghai Composite finally gave in and gave up trying to break free out of its congestion zone around 3600 points, collapsing 6% back to its temporary support level (the middle orange line on the chart below). Momentum is not yet negative, but this has all the hallmarks of a failed bear market rally:
