Thursday June 3, 2010 - 18:20:39 GMT
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Forex Hound - www.forexhound.com
Stocks Sell Off as Investors Refuse to Chase the Market
U.S. equity markets are
trading sharply lower at the mid-session after an overnight surge
failed to draw fresh money into the market. In keeping with the over
year-long pattern, investors refused to chase this market higher after
a strong opening.
Profit-taking is hitting the market and
todayâ€™s down move may be exaggerated because of thin trading conditions
ahead of Fridayâ€™s U.S. Employment Report. Technically, the June E-mini
topped out near a major 50% level at 1105.75 and slightly under last
weekâ€™s high at 1106.75. A break out above this price will turn the main
trend to up on the daily chart.
The short-term picture looks
potentially bullish because of the higher bottom that was formed at
1067.25. The current chart pattern suggests that a break back to
1086.25 is possible today.
August Gold fell sharply lower this
morning on profit-taking after failing to hold a .618 price at $1219.50
and a 50% price at $1209.70. The lack of fresh news regarding the Euro
Zone and a stronger U.S. Dollar gave investors an excuse to take some
money off the table.
Thin trading conditions ahead of the U.S.
Non-Farm Payrolls Report on Friday and less than stellar economic news
from the Euro Zone is helping to weaken the Euro at the mid-session.
risk appetite appeared to be returning to the markets on Wednesday
because of better than expected U.S. housing data, this idea was
dampened on Thursday after the Euro Zone reported an unexpected drop in
retail sales in April. There was an upward revision to the May
Purchasing Managerâ€™s Index but that wasnâ€™t enough to level off the
market. Analysts now believe that based on the data, the next recovery
is going to be triggered by renewed investment or net trade rather than
by consumer spending.
Technically, the June Euro is in a
downtrend but trading inside of a short-term range of 1.2453 to 1.2110.
Downside momentum is building which could drive this market through the
low-end of the range, which could trigger a sharp break.
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