The premier Chinese rating agency, the Dagong Global Credit Rating Co., downgraded the U.S credit rating to A+ from AA, citing a “deteriorating debt repayment capability and the drastic decline of the government’s intention of debt repayment”. This brought some negative bias into the market and gave traders more excuse for profit taking yesterday. At the end, ES closed down about 9 points.
Today 1206 will be an important level for the downside move. If this level can be held up in the morning, a consolidation move could be seen for a little while. Any later move will depend on which direction ES intends to breakout. A move above 1218.75 line will bring buyers into the market again and could squeeze the price back up to the 1225 area. A break below 1206 will lead odds to push price down to 1197-95 range for try to fill last Friday’s gap.
This afternoon the Fed will publish the QE2 operation schedule. Any unexpected action from the Fed could move this market in either direction. There is lots of uncertainty. The meeting of G20 finance ministers will take place in Seoul this week. Any decision made by that meeting can also influence our market.
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ESZ0 Daily chart
ESZ0 Intrday – 60-minute bars
