U.S. equity markets are trading sharply lower overnight. This weak start is expected to spread to the U.S. opening. Global traders have taken risk off the table overnight as the Euro failed to rally the past two nights after an agreement to bailout the ailing nation was approved over the week-end between Greece, the European Union and the International Monetary Fund.
Traders feel that the money is “too little, too late” to revive the economy and that the newly approved austere financial cuts will plunge the nation even deeper into recession. Furthermore, investors are also beginning to buy into the thought that the Euro Zone fiscal problems are spreading and that the once thought to be contained sovereign debt problems will eventually reach global proportions.
Technically, the E-mini S&P 500 is currently giving about close to half of Monday’s rally. The charts are now indicating that yesterday’s rally may have just been a 50% retracement of the 1216.75 to 1176.75 range. This retracement zone is 1196.75 to 1201.50.