Monday May 3, 2010 - 19:06:43 GMT
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Easing of Risk Concerns Help Boost Equity Markets
U.S. stock indices are
trading higher at the mid-session. Stocks were called higher before the
opening because of the deal between Greece, the IMF and the EU but
continued to strengthen after the U.S. reported that April
manufacturing grew at its fastest pace in almost six months. Stocks
received an additional boost after the U.S. reported that construction
spending was up after economists estimated a decline.
strong surge in the June E-mini S&P 500, the market remains inside
of last weekâ€™s range. Last weekâ€™s closing price reversal top hasnâ€™t
been confirmed, but the reversal top remains intact. A trade through
1216.75 negates the reversal top. A move through 1176.75 will confirm
the reversal top. At the mid-session, this market is hugging the 50%
level of this range at 1196.75.
June Gold and June Crude Oil
continue to rally on increased demand for higher risk assets. Gold is
also getting a boost from traders speculating on the demise of the
Euro. Speculators are driving up crude oil because of the spill in the
Gulf. Although experts say the spill should have no effect on the
markets, speculators believe it will lead to increased demand for
Middle Eastern oil.
The June Euro continued its plunge into the
mid-session as traders remained nervous that sovereign debt issues
would continue to spread across the Euro Zone. Particularly, traders
believe that the high level of debt in Spain and Portugal will lead to
even deeper problems in those two countries.
received close to $146 billion in financial aid from a joint EU/IMF
bailout package, traders were disappointed that the policymakers did
not address the other problems in the Euro Zone. Many feel that the
EU/IMF is falling behind the growing debt issues in the Euro Zone and
being reactive rather than proactive. The question being asked is how
far will the EU/IMF allow the fiscal problems in Spain and Portugal to
worsen before aid is even considered?
Todayâ€™s hard sell-off in
the Euro today indicates that the shorts are still in charge. Based on
the chart pattern, downside momentum seems strong enough to suggest
that a test of the recent bottom at 1.3114 is likely. In addition, it
looks as if 1.3342 will be defended by short traders.
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