Thursday September 30, 2010 - 05:39:43 GMT
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Forex Hound - www.forexhound.com
U.S. Stocks Finish Lower Under Thin Conditions Ahead of GDP Report
stock markets closed lower under thin trading conditions as most major market
participants took the day off ahead of tomorrowâ€™s 2Q GDP report. This left the
market wide open for day-traders and scalpers who created a little volatility
early before eventually settling down after the mid-session.
Economists estimate that the GDP report will show a gain of
1.6%. A higher number should be outright bullish for stocks. Things could get
tricky if the report comes out lower than expected. In this case, look for
whip-saw like action. Traders are likely to sell the market initially on a
lower number then buy it back cheaper. A lower number will mean the Fed will
definitely ease more in the form of additional quantitative easing. Stock
traders seem to love it when the Fed gives them more money with which to play.
After falling from its overnight high, equity markets traded
in a choppy pattern. Investors continued to buy the breaks Wednesday morning like
they have been over the past five days, creating a rangebound trading
environment. Without any major U.S.
economic reports to guide them, investors were forced to focus on the falling
Dollar and rising Gold prices.
The Dollar continued to weaken against most major currencies
on speculation the Fed will ease once again in the form of additional
quantitative easing. The Euro saw another surge to the upside although
sovereign debt issues continue to brew in Ireland
The Japanese Yen found resistance after an overnight surge on speculation the
Bank of Japan may intervene.
November Crude Oil made a surprise turnaround to the upside
and is now challenging a major 50% price level at 77.70 after inventories
surprisingly fell. December Gold pushed higher in limited action. The lack of a
major seller is helping to boost prices. Talk of additional quantitative easing
and sovereign debt issues in the Euro Zone continue to create fear and concern
which is helping to underpin the precious metals.
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