The US equity markets were in rally mode on light volumes until this afternoon when news that Deutsche Bank will be raising a substantial amount of capital (9 billion euros or roughly 11 billion US dollars) through a share sale took the wind out of the sails of the financials which had been leading the charge higher.
Deutsche Bank, aka Buba, is considered the 'gem' of German banks, and this dilution of almost 30 per cent came as a shock as it is almost three times as much as was expected if they were making a significant increase in their 30% ownership of Deutsche Postbank AG that has been discussed. It brings into question what is coming out of the Basel III discussions, as well as further speculation about what bad debts remain undiscounted on the banks' balance sheets.
SP 500
NDX
The Nasdaq 100 futures chart in particular shows the significance of the resistance trend that the NDX faces right now.
"A new, invisible and at times virtual, tyranny is established, one which unilaterally and irremediably imposes its own laws and rules. Moreover, indebtedness and credit distance countries from their real economy and citizens from their real buying power. Added to this, as if it were needed, is widespread corruption and selfish fiscal evasion which have taken on worldwide dimensions. The will to power and of possession has become limitless." Francis I, 16 May 2013