Stocks Eke Out Small Gains, Canadian Dollar Feeling Pressure
E-mini S&P Ekes Out Small Gain Following Weak ADP Jobs Data
Increased demand for higher risk assets overnight is helping to drive U.S. equity markets overnight. After several days of sideways trading, and the appearance that the markets were going to remain rangebound, the December E-mini S&P 500 finally broke out to the upside; leading to speculation that today may be a “risk on” day.
Euro Momentum Takes Out 1.3049 Fibonacci Objective
A strong surge in upside momentum this morning drove the Euro higher and straight through a Gann Angle/Fibonacci Level Cluster at 1.3044 – 1.3049. The market has since peeled back after the break out and is now resting on this cluster. Traders should watch this area today for direction as it is most likely to act as a pivot.
One debate that will go on this week centers on the Fed. One question traders are asking, “Is the Fed out of bullets?” All signs point out that the government’s stimulus plans as well as the Fed’s activity have done nothing to stimulate the economy. The housing market is bad despite mortgage rates below 5%. Unemployment is high and expected to rise.
Stocks Wipe Out Weekly Gains; Possible Reversal Top in the Making
U.S. stock futures struggled a bit on Wednesday but were able to post their 7th consecutive gain. Stocks were expected to trade sharply higher on the heels of a strong earnings report from Intel but demand for equities faltered overnight due to concerns about European bank stress tests and today following a weak Retail Sales report.
The EUR USD fell to a new low for the year, in effect, wiping out the $1 trillion bet placed by the European Union over the week-end. Now that the short-term fix has been eliminated by the market action, the downtrend can resume its normal course. It looks at this point that the EU and IMF are out of bullets so buckle your seatbelt.