Friday, March 12, 2010

Stocks Poised to Continue Rally; Demand for Risk Weakens Dollar

Retail Sales just came out bullish. Equity markets are soaring. Bonds are breaking. The Dollar is plunging. The market reads this report as good. The key will be to be able to
separate the report from the trade. The question is will U.S. investors chase equity market higher or wait for a pullback? Overall, however, it looks like a strong report.

U.S. equity markets are trading better overnight ahead of this morning’s Retail Sales Report. Demand for higher risk assets, the weaker Dollar and low volatility are helping to
support the indices. The March E-mini daily swing chart has been projecting a test of 1156.00 by March 12th. Strong overnight action has this market in position to test this level. In addition the
March E-mini Dow chart shows this market has room to run to the upside with the January high at 10687 the next likely target.

Demand for risk is pressuring the June Treasury Bonds. This market is currently testing a major 50% price at …