Tuesday April 13, 2010 - 18:21:41 GMT
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Equity Markets consolidating Ahead of Economic Reports, Testimony
U.S. equity markets are
consolidating at the mid-session ahead of tomorrowâ€™s U.S. inflation and
retail sales reports. Besides the reports, traders are anticipating Fed
Chairman Bernankeâ€™s testimony. Some traders feel Bernanke will offer
more guidance on when the Fed will raise interest rates.
mid-session, the Dow has been toying with the 11,000 area after closing
above it on Monday. Traders seem a little tentative chasing strength in
this market and may opt once again to support the long side on dips
only. Weighing on traderâ€™s minds at the mid-session is the direction of
the Dollar and corporate earnings.
June Treasury Bonds and
Treasury Notes are barely holding on to this morningâ€™s earlier gains.
The strong surge in Treasuries was attributed to traders hedging bets
against a drop in equity prices due to the possibility of worse than
expected earnings reports. Based on the short-term range of 118â€™12 to
114â€™06, the current rally has retraced back into a potential resistance
zone at 116â€™15 to 116â€™29. Selling resurfaced this morning inside of the
retracement zone, putting pressure on the market at the mid-session.
Gold is trading lower after falling back inside a retracement zone at
$1137.80 to $1159.50. The Dollar has hardly moved the past two days
which leads me to believe that todayâ€™s selling pressure is related to
the easing of Greek tensions. Bullish traders have been building
positions in anticipation of a collapse in the Euro due to the
floundering Greek fiscal situation. Todayâ€™s sell-off may be traders
liquidating their positions as tensions have eased following the new
European Union proposal. The charts indicate a test of $1137.80 is
likely within a day or two.
June Crude Oil is trading weaker but
off its low as demand for risky assets is falling. The trend is still
up, but the chart formation is suggesting that longs are bailing out.
Look for a minimum pullback to 83.43 over the near-term before new
buyers step in.
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