Tuesday, April 13, 2010

U.S. equity markets are called lower this morning after a limited overnight trade. Yesterday, the Cash Dow closed over 11,000 but there was little investor reaction
following this largely psychological event. Traders seem a little tentative chasing strength in this market and may opt once again to support the long side on dips only.

Investors have two factors on their minds at this time: risk sentiment and earnings. The risk sentiment factor centers on Greece and its ability to shore up its finances.
Traders are watching this situation closely to determine whether the Dollar will strengthen or weaken. A stronger Dollar could pressure stocks as this would be a sign that investors are looking for
protection. A weaker Dollar will be an indication that traders are looking to take on the risk of holding higher yielding assets. The best currency to watch for direction will be the Euro.

Equity investors are also concerned about first quarter earnings reports and the future outlook for earnings. Although earnings reports may come out better than expected