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Short-Covering Rally Triggers Late Surge in Equities

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, Dec 30, 2009.

  1. futuretrends24

    futuretrends24 New Member

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    Today’s sample of Futures Analysis from FuturesHound.com

    U.S. equity markets finished higher after a mid-session break threatened to take the markets lower into the close. Stock indices reversed earlier weakness on the heels of a better than expected Chicago Purchasing Managers Index, but failed to maintain the upside momentum sending them lower at the mid-session. The catalyst behind the mid-session weakness appears to be end-of-the year profit-taking. The lack of selling pressure into the close triggered a short-covering rally which took the stock indices higher for the day.

    March Treasury Bonds closed higher. End-of-the-year position evening has been the catalyst behind the slight rise the last two days. Technically, holding above 115’08 is friendly and could trigger a short-covering retracement to 117’01 over the short-run. Longer-term, the threat of rising interest rates, oversupply of debt and a strong stock market should help to maintain downside pressure on the Treasuries. Despite the increase in Treasury debt this week, traders have had very little reaction to this potentially bearish news.

    February Gold closed lower for the day, but inside of a key retracement zone at $1094.80 to $1090.20. The stronger Dollar pressured February Gold this morning, but the turnaround in the Dollar at the mid-session led to a short-covering rally in gold. The current chart pattern suggests that the main trend will turn up when the market crosses $1114.50.

    Read full article at full article at FuturesHound.com as well as Futures Analysis, Futures Education and exclusive timely market Gann Analysis

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