Monday, February 22, 2010
U.S. stock indices are trading in a tight range overnight as investors await testimony before the House Financial Services Committee by Fed Chairman Bernanke. Expectations are for
Bernanke to talk about the state of the employment situation as well as addressing whether more financial stimulus is required.
Investors will be looking for clues as to if or when the Federal Reserve will begin to hike interest rates in 2010. Signs that rates will rise will likely support the Dollar which
could put pressure on U.S. stock markets. Technically, the March E-mini S&P 500 is indicating that this market wants to move higher. The overnight trade took out a .618 retracement level at
1107.00. This price is new support. A failure to hold this level could trigger a break to 1094.50.
Slightly better equity markets overnight are helping to pressure Treasury futures. Currently, the March Treasury Bonds are in a downtrend but trading inside a retracement zone at
117’01 to 116’14. Concerns over the Fed hiking interest rates are keeping bullish traders away from the long-side.
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