U.S. equity markets rallied sharply higher on Thursday as tensions eased in the Euro Zone prompting investors to turn up demand for higher risk assets. The strong surge in the June E-mini S&P 500 negated Wednesday’s hard sell-off, triggering a rally through the minor retracement zone at 1074.50 to 1082.25. The market must now try to build support in this area if it wants to build enough upside momentum to drive it through the last main top at 1107.75 and turn the main trend to up.
The June E-mini NASDAQ lagged a little behind the S&P today but nonetheless closed in a position to break out over a downtrending Gann angle and 50% price level at 1829.25. This move should trigger a strong acceleration to the upside.
September Treasury Bonds sold off sharply on Thursday as traders shifted money from the safer T-Bonds to the more risky stock market. Minor support at a 50% price level at 123’22 was broken early this morning, triggering an acceleration to the downside. A new main top has been formed at 125’00 indicating the formation of a secondary lower top. A trade through 121’06 will turn the main trend to down and should trigger a further decline to the major 50% level at 119’22.