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September S&P Posts Reversal Bottom on Increased Demand for Risk

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, Jul 6, 2010.

  1. futuretrends24

    futuretrends24 New Member

    Apr 30, 2009
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    Today’s sample of Futures Analysis from FuturesHound.com

    The September S&P 500 posted a closing price reversal bottom after investors turned up demand for higher risk assets. Oversold conditions and a weak U.S. economy helped to boost equity markets throughout the day after a strong showing in Asia and Europe overnight boosted demand for risk. This bullishness was clearly in the U.S. markets on the opening. Later in the morning the U.S. announced a slowdown in U.S. services. This news weakened the Dollar and drove up equity markets.

    A weaker economy means the Fed is likely to keep interest rates low, driving up demand for higher risk investments. Investors are treating the weak U.S. economic reports as a sign that liquidity and low interest rates will remain intact for a prolonged period of time. With Ten-Year Treasuries yielding close to 3.00% investors are going to be looking elsewhere to boost their return on investments. This place is likely the equity markets.

    Technically, the reversal bottom formation suggests a move to perhaps 1066.00 over the next 2 to 3 days.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

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