Wednesday August 11, 2010 - 19:24:07 GMT
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Forex Hound - www.forexhound.com
Worldwide Slowdown Drives Equities Lower
stocks are down at the mid-session as concerns about a worldwide economic
slowdown are driving down demand for higher risk assets.
A weak economic report from China ignited
todayâ€™s sell-off but the embers were burning well ahead of the release of
reports showing a decline in Chinese industrial output and weak retail sales.
The Fed most likely triggered the pessimistic outlook for the global economy on
Tuesday when it said in its policy statement that it expects prolonged weakness
in the economy and loosened its monetary policy by shifting assets from
mortgages to long-term debt.
With both the U.S. and Chinese economies critical
to the global economy, many investors are beginning to worry about the worldâ€™s
Last night the U.K. also contributed to the equity
market weakness after the Bank of England lowered its growth outlook. With new
austerity measures ready to kick in along with higher taxes, investors are
worried about the strength of the British economic recovery.
Stocks lost more ground early this morning
after the U.S.
said its trade deficit widened to $49.9 billion in June, more than many
analysts had anticipated. This news caused some experts to revise downward
After seven days of rangebound trading, the
September E-mini finally broke out of its range to the downside. This type of
pattern usually indicates impending volatility which we are seeing today.
Technically this market broke through a
50%/uptrending Gann angle combination which triggered stops into the
mid-1190â€™s. So far this index is holding a swing bottom at 1083.50, but
downside momentum is building which could see this level taken out. This would
change the main trend to down. Ultimately, the E-mini is set up for a minimum
correction to a 50% level at 1065.25.
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