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Equities Tread Water after Firm Opening

Posted by Futureshound on December 14th, 2009

U.S. Equity markets treaded water most of the session after a firm opening. Once again a gap-higher opening during the day session in the stock indices failed to attract strong buying interest. This was no surprise, however, as traders have backed away many times from chasing this market during its nine-month rally.

Dollar Rally Pressuring Equities

Posted by Futureshound on December 9th, 2009

An intraday rally in the Dollar is helping to pressure U.S. stock index futures. Traders are jumping in the Dollar for safety and out of higher risk assets. Fears that a global debt crisis is building is causing traders to seek shelter in the Dollar.

U.S. stock index futures are trading better overnight after the inability to follow-through to the downside following yesterday’s sell-off triggered a short-covering rally. The lack of fresh news regarding debt issues in Dubai and Greece is also encouraging traders to take on more risk.

U.S. equity markets are called lower this morning following sell-off in Asia and Europe. The stronger Dollar is leading some investors to pare positions. Traders are trying to protect profits at the end of the year as chart patterns suggest there is more downside than upside potential at current levels.

Equity futures traded inside of last Friday’s range before finishing lower for the day. The mixed Dollar helped trigger a two-sided trade. The daily December E-mini S&P 500 held support at 1098.50 to 1093.50. The December E-mini NASDAQ has support at 1779.00 to 1770.25. A sell-off today could send the December E-mini Dow down to a retracement zone at 10357 to 10321.

Shortly after the release of the U.S. Employment Report, the December E-mini S&P 500 rallied to a new high for the year at 1119.00 just short of a major 50% level at 1122.00. The subsequent break from 1119.00 found support at a short-term retracement zone at 1098.50 to 1093.50.

U.S. equity markets are trading higher which should lead to a better opening this morning. Demand for risk has returned to the markets, driven by a sharply lower Dollar.

U.S. equity markets are trading higher which should lead to a better opening this morning. Demand for risk has returned to the markets, driven by a sharply lower Dollar.

The U.S. Dollar is trading lower against all majors as overnight rallies in the stock indices and gold are once again pulling the Dollar lower and signaling renewed demand for higher risk assets.

Demand for higher risk assets helped to trigger a strong rally in U.S. stock markets. The December E-mini Dow contract took out the October high at 10068 and made a new high for the year. The December E-mini NASDAQ and S&P 500 closed within striking distance of their highs for the year.

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