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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

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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

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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