The Unfortunate Truth About an Overbought Stock Market
Writing about financial markets is probably the most challenging endeavor I have ever immersed myself into. I am a trader first and a writer second, but I have really come to enjoy scribing missives about financial markets because it really forces me to concentrate on my analysis.
Oversold conditions and the lack of fresh bearish news helped the Euro turn around and close higher for the day. Fundamentally, nothing happened to change the minds of traders. Investors are still concerned that the European Union is not doing enough to fix the financial problems in the Euro Zone.
Oversold Condition, Weakening Dollar Fuels Gold Rally
A combination of oversold conditions and a weakening Dollar is helping to fuel a strong recovery rally in April Gold. After failing to attract fresh selling pressure following the break under the December bottom at $1076.50, this market formed a two-day support base before moving higher.
Oversold Technical Conditions Boost U.S. Dollar Overnight
The U.S. Dollar is trading higher overnight based on oversold technical conditions. Yesterday’s comments from Fed Chairman Bernanke regarding the Dollar may also be triggering a short-covering rally as well a position-lightening. The overnight action has not been sufficient enough to call for a change in trend.