June 8, 2010
U.S. Stocks Recovering; Called Steady to Better this Morning
U.S. equity markets are expected to open better this morning despite a break from their overnight highs. Stocks were trading better in the night session following a sharp
sell-off on Monday. Traders were reacting to the firm Euro and to positive comments from Fed Chairman Bernanke.
The break on Monday in the June E-mini S&P and the overnight follow-through to the downside stopped short of taking out the recent main bottom at 1036.75. The main
trend is down, but the market seems ripe for a short-covering rally due to oversold conditions. Based on the short-term range developing between 1107.75 to 1045.50, a retracement to 1076.50 is
possible over the short-run.
Besides the oversold technical factors, investors may take shots at the long side of the market today if the Euro can stabilize. The commodity-linked currencies indicate
a slight increase in demand for risk.
Despite the firm equity markets ahead of the opening, September Treasury Bonds are trading …
