Thursday November 11, 2010 - 15:04:59 GMT
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E-mini S&P 500 Could Test 1196.25
pressure continued to mount on the December E-mini S&P 500 overnight as
traders continued to shed risky assets amid speculation of debt woes in the
Euro Zone. Without major economic releases to follow and a Treasury Bond market
to lean on because of the U.S. Veteranâ€™s Day holiday, thin market conditions
and low volume could lead to volatility.
the main range of 1167.75 to 1224.75, traders should watch for a possible break
into a retracement zone at 1196.25 to 1189.50.
morning, the E-mini S&P 500 is toying with an uptrending Gann angle at
1211.75. This is the last major support as the next angle comes in at 1189.75,
followed by 1178.75. Combined with the .618 retracement level, 1189.75 to
1189.50 forms a major support cluster.
Gann angles from the 1224.75 top are at 1218.75, 1212.75 and 1200.75. Coupled
with the uptrending Gann angle, 1211.75 to 1212.75 forms an â€śXâ€ť on the chart
which identifies a key resistance cluster.
December Euro continued its slide overnight after breaking a pair of main
bottoms on the daily chart at 1.3733 and 1.3698, turning the main trend to down
on the daily chart. Overall, the U.S. Dollar is posting modest gains versus
continued to feel pressure from persistent concerns about Irelandâ€™s fiscal issues and
turbulence in sovereign debt markets. Without any major European reports to
draw investor attention and the U.S. Veteranâ€™s Day holiday, traders have been
watching for news regarding Europeâ€™s
peripheral debt issues.
continues to grow that Ireland
may soon have to resort to tapping the European Union/International Monetary
Fund stabilization fund established earlier this year as part of the â€śbailoutâ€ť
telltale sign that trouble may be brewing continues to be the soaring of Irish
government bond yields. Yields rose to 8.9% as investors dumped peripheral
bonds. The cost of insuring Portuguese, Irish and Spanish debt against default
remained high, indicating worries are likely to persist.
Technically, the main trend
is now down on the daily chart following a break through two main bottoms at
1.3733 and 1.3698. Based on the main range of 1.2587 to 1.4282, watch for the
correction to continue down into a retracement zone at 1.3434 to 1.3234.
Impeding the current
correction and possibly slowing down the pace of the break is an uptrending
Gann angle at 1.3727. A failure to hold this level will likely trigger a
further decline into another Gann angle at 1.3524. There are no major support
clusters set up at this time.
On the upside, a
downtrending Gann angle from the 1.4282 main top comes in at 1.3882 today. This
angle is followed by additional angles at 1.4082 and 1.4182.
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