May 4, 2010

Stocks Called Sharply Lower as Traders Take Risk off Table

U.S. equity markets are trading sharply lower overnight. This weak start is expected to spread to the U.S. opening. Global traders have taken risk off the table overnight
as the Euro failed to rally the past two nights after an agreement to bailout Greece. The bailout was approved over the week-end between Greece, the European Union and the International Monetary

Traders feel that the money is “too little, too late” to revive the economy and that the newly approved austere financial cuts will plunge the nation even deeper into
recession. Furthermore, investors are also beginning to buy into the thought that the Euro Zone fiscal problems are spreading and that the once thought to be contained sovereign debt problems will
eventually reach global proportions.

Technically, the E-mini S&P 500 is currently giving about close to half of Monday’s rally. The charts are now indicating that yesterday’s rally may have just been a
50% retracement of the 1216.75 to …