May 14, 2010
France Threatens to Pull-Out of Euro Zone
U.S. equity markets are plunging this morning following a drop in the Euro under 1.25. The move in the Euro began as a report that France’s president had threatened to
pull his nation out of the Euro Zone. French President Nicolas Sarkozy’s comments reignited the fear of a collapse in the currency. Traders are divesting out of higher risk assets pressuring U.S.
stocks.
The drop in the Euro spread fear to the global equity markets which began to weaken overnight. This set up the U.S. equity markets for a break following Thursday’s
closing price reversal top.
Technically, the June E-mini S&P 500 is set up to retrace at least 50% of the week-long rally. The move from 1056.00 to 1174.75 creates a retracement target at
1115.50 to 1101.50.
Pressure is on the June E-mini NASDAQ this morning. Thursday’s closing price reversal top sets up a potential break to 1856.00 to 1126.25.
The bearish closing price …
