Tuesday, March 9, 2010
The lack of major economic reports today means the direction of the Dollar is likely to exert more influence on the U.S. equity markets. With the Dollar up overnight because of risk
aversion, traders are selling equities. Yesterday’s tight trading range and lack of follow through during the New York session may have been indications that the stock markets are overbought. The
daily March E-mini S&P chart suggests that a break through 1128.75 may accelerate the move to the downside.
June Treasury Bonds are trading better overnight as traders shift money out of higher risk assets and into the lower-yielding, lower-risk Treasuries. In addition, short term support
has been reached at a 50% level at 116’04.
April Gold is feeling pressure because of the stronger Dollar. In addition, a report that China may be buying less gold in the future is hurting demand for the precious metal. This
morning, gold is testing minor support at $1117.20. A break through this level could trigger a further break to $1110.40.
The strengthening Dollar and weaker demand …
