Monday January 4, 2010 - 19:53:57 GMT
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Demand for Higher Risk Assets Drives S&P through Recent High
Renewed demand for
higher risk assets helped to drive the March E-mini S&P 500 through
the December high at 1126.50. A better than expected U.S. Manufacturing
report helped to underpin the U.S. markets and create upside momentum.
surge in demand for higher yielding assets is also helping to drive
crude oil and gold prices higher. A firm undertone has been present
throughout the day at the expense of the Dollar.
rally in February Gold turned the main trend to up on the daily chart
on the move through $1114.50. The daily chart indicates this market is
poised to rally another $30 back to a retracement zone at $1151.30 to
The news of a better than expected surge in Chinese
manufacturing is helping to trigger a breakout to the upside in March
Crude Oil. Traders are expected to see increased demand for energy. In
addition, cold weather in the U.S. has led to a pick-up in demand for
heating oil and natural gas. The last main top at 81.52 was broken
overnight, setting the stage for a test of the October top at 83.60.
friendly U.S. Manufacturing report is helping to weaken the Dollar at
the mid-session by driving up demand for higher yielding assets.
Dollar opened the first trading session slightly better but a strong
surge in U.K. and China manufacturing data helped to pressure the
Dollar overnight. These two better than expected reports triggered
renewed interest in demand for higher risk assets.
chart pattern in the March Euro suggests the first upside objective
over the short-term remains 1.4680 to 1.4790. Whether traders go after
this level will be determined by a slew of U.S. economic reports this
week especially the employment report on January 8th.
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