1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

“Living On the Edge”

Discussion in 'Beginners Bootcamp' started by dojit, Mar 25, 2009.

  1. dojit

    dojit Private

    Joined:
    Nov 27, 2008
    Messages:
    7
    Likes Received:
    0
    “Living On the Edge”
    by Dodjit.com
    The U.S stock market closed yesterday’s session in negative territory after trading higher throughout most of the session. The main reason for the drop in equities, apart from profit taking was due to Ben Bernanke and Treasury Secretary Tim Geithner’s statement, calling for more regulation over the financial system. The S&P 500 closed down with a loss of -2.03% while the Dow Jones Industrial Average, wiped out -1.49% of Monday’s gains. The loser of the day was the financial sector dropping by -4.8%.

    Despite yesterday’s drop, investor sentiment recently started to show slight signs of improvement. Recent economic reports have surprised investors, as data like retail sales, housing starts and inflation have all come out higher than analyst’s expectations. In addition, with ongoing comments by U.S officials and recent actions (buying of long term government bonds, to reduce the rates for the end consumer), one can surely see the change, which has been reflected in the last two- week rally.

    Despite the negative session in the U.S, Asian stocks continued higher throughout the night on optimism that Obama’s plan will help to save the global economy and revive Asian countries’ exports. Japan’s exports have been battered over the last couple of months, as a drop in U.S consumer consumption has spread globally, having a rippling effect on the world economy.

    A Mixed Session for the Dollar

    The Dollar index continued to trade in minor range yesterday, clinging on for dear life around trend line support. After Monday’s massive 7% increase on equities, a rally that had an enormous effect on the Forex market, yesterday’s session failed to have the same amount of impact.

    The major mover of the day was the Pound, increasing substantially against the U.S Dollar. The GBP/USD raced higher throughout the session as economic data surprised analysts, coming out much higher than expected. Inflation data coming out from England showed that CPI rose by 0.9% in the month of February, after declining last month by a whopping -0.7%. In addition, the Retail price index rose for the first time in 5 months, coming out at 0.6%. The GBP/USD climbed higher throughout most of the session, closing at $1.4690.

    Gold continued to lose ground during yesterday’s trading session, due to the Dollar increase. Even though Gold has recently shown signs of a break-out it has failed to follow through on the chart, retracing back to trend line support around $930 per ounce. Gold’s drop on Monday was due to the U.S Treasuries’ plan to remove toxic assets from the financial sector to help the economy. Recent news events have encouraged investors to reduce their holding on metals, as a safe- haven against inflation.

    What to Look Out For Today

    Looking forward, most of the major market moving data will come out later on during the session and will be released from the U.S. New Home Sales will be scrutinized, especially as recent data, including housing starts and building permits have both shown a slight improvement. In addition Durable Goods will be released later today and is expected to show a less of a contraction compared to last month’s result of -4.5%.
    The Dollar Index
    [​IMG]
    Market Pivot Points
    [​IMG]

    Enjoy
    Dodjit
     

Share This Page