Thursday March 25, 2010 - 19:13:39 GMT
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Stocks Up in Labored Trade
U.S. stock indices are
trading higher at the mid-session in a labored trade. Although the
moves to the upside have been strong, the markets have had a series of
retracements throughout the day. This type of trading action has
allowed some of the longs to lighten up positions on the rallies and
re-enter on the breaks.
Relief that the Greek debt situation is
being addressed at this weekâ€™s two day European Union summit was the
catalyst behind the start of todayâ€™s rally. Overnight, foreign debt
concerns eased a little. Last night German Chancellor Angela Merkel
said she would back aid for Greece with International Monetary Fund
involvement as a â€ślast resortâ€ť. European Central Bank President Trichet
helped ease tensions by extending the bankâ€™s emergency lending rules.
This move by Trichet was a marked change from the ECBâ€™s decision not to
soften its collateral policy to aid a single country.
Jobless Claims fell as the employment picture looks to be improving.
Initial claims fell 14,000 to a seasonally adjusted 442,000 in the week
ended March 20th. Pre-report estimates were for a drop to 450,000.
are basically moving higher because they are the only game in town.
Interest rates remain low, the economy is improving and there is still
enough stimulus money to provide liquidity.
June Treasury Bonds
fell once again on the rise in yields. The futures markets are
indicating that higher interest rates are coming and inflation may be
right around the corner. The cause of the rise in yields is being
attributed to increased competition with corporate debt issuers.
Investors are in control because of the increased supply of debt
hitting the market. Because of this condition, they can ask for higher
yields. Downside momentum is building which could take the June T-Bonds
to 114â€™15. Watch for a quick short-covering rally because of oversold
The sideways trading action in the Dollar is
triggering a two-sided trade in June Gold. Without any solid news from
the EU summit, speculators have had very little to trade off. Earlier
trading action indicates that the direction of the Dollar is
controlling the movement in the gold market.
The main trend is
down in June Crude Oil, but like gold, the down trend has not been able
to accelerate because of the lack of selling pressure. The sideways
Dollar has created light, choppy conditions in the crude oil market.
Like the other higher risk assets, investors are waiting for something
to come out of the EU summit to move the markets
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