Monday, March 22, 2010

U.S. stock markets are expected to open lower this morning after overnight pressure. Stocks opened weaker in reaction to an interest rate hike in India. This is fueling speculation
that a rate hike by China will be next. Fear over Greek financial issues flaring up again are pressuring the Euro which is raising risk in the equity markets.

The passing of the healthcare reform bill overnight is not sitting well with equity traders. Many traders feel the new law will increase the government deficit. The June E-mini
S&P 500 looks vulnerable to the downside with 1122.75 a potential target.

June Treasury Bonds are trading lower ahead of the opening. Trading has been tight and volume low overnight despite weaker equity markets and a stronger Dollar. A substantial drop in
equity markets could trigger a flight to quality rally into the T-Bonds. A break under 117’23 could indicate weakness.

April Gold is under pressure due to weaker demand for higher risk assets and the stronger Dollar. Downside momentum indicates further weakness is likely with a change …