February 12, 2010
U.S. Stocks Mount Strong Recovery after Early Session Weakness
Equity markets finished nearly unchanged on Friday after a volatile and tumultuous trading session. The indices weakened in premarket trading following a surprise move by China’s
central bank to curb excessive credit demands. Recent data has shown that China’s economy may be heating up too fast which could lead to an asset bubble in the real estate and housing markets.
Commodity markets were hit hard following the increase in the China bank reserve rate. This put selling pressure on commodity-linked stocks. Risk aversion returned to the markets
which led to the early session sell-off.
Better than expected U.S. Retail Sales helped to give equity markets a boost, but news that consumer sentiment fell according to the Michigan Survey helped to limit early session
gains. Thin trading conditions may have led to the late session strength.
The stronger Dollar put pressure on April Gold, erasing the vast majority of Thursday’s gain. The short-term chart indicates the possibility of a wide range next week with $1106.00
upside resistance …