Tuesday September 28, 2010 - 21:44:38 GMT
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Forex Hound - www.forexhound.com
December E-mini S&P 500 Confirms Reversal Top
U.S. equity markets are struggling to hold
onto gains at the mid-session after weaker-than-expected results from the
September Consumer Confidence and the S&P/Case-Shiller 20-city home price
fell to a reading of 48.5 in September, from Augustâ€™s level of 53.2. Economist
guesses pegged the report at 53, putting it well below estimates. The home
price index grew a modest 3.18% in July, below the pre-report guess of 3.3%.
Both reports were
further proof of a weakening economy, driving stocks lower and setting up the
possibility of a double-top formation.
Coupled with the
high unemployment rate, the drop in consumer confidence shows that the economy
is still facing the threat of a double-dip recession. Unless the employment
situation improves, thereby driving up consumer confidence and spending, it is
possible that a double-tip recession may not be able to be averted.
action suggests that investors are still buying the dips. Gann angle support is
at 1124.50. A break through this price could trigger an acceleration to the
downside. As it stands at the mid-session, todayâ€™s support is the old
resistance at 1128.00.
picture suggests that more downside pressure is likely now that the daily
closing price reversal top from Monday has been confirmed. This pattern often
leads to the start of a 50% correction of the main range or in this case, a
break to 1091.25 over the near-term. A trade through 1049.75 will negate the
Remember the Rule
of Three. Often the market lets investors in twice on dips before the third
break fails, leading to a sharp sell-off.
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