S&P Futures Test 1200
Monday, April 12th, 2010Monday, April 12, 2010
The S&P futures are chugging on higher and testing their highly psychological 1200 level as the risk trade rallies in reaction to the EU’s announcement that it will provide Greece with roughly $40 billion @ 5%. Though the interest rate is a bit higher than Greece had hoped, the offer of support is reassuring investors and uncertainty is abating as the volatility index slides lower. The Euro, Cable, Aussie, and gold are all surging higher, breaking out of slumps and key technicals as investors jump back into risk. This development is naturally benefiting U.S. equities due to their tendency to exhibit a negative correlation with the greenback. Additionally, U.S. unemployment data has still been unimpressive, meaning the Fed will have to keep the liquidity gates open, a positive for the S&P futures due to the massive cheap liquidity available to corporations. Mean while, the data wire will be relatively quiet until tomorrow’s U.S. Trade Balance data, meaning present momentum could remain in play unless there is a key psychological development. Investors will be looking for an improvement in demand for U.S. exports since an important element of the recovery should be a decline in America’s trade deficit. Since U.S. manufacturing data has been positive lately it wouldn’t be surprising to receive a solid Trade Balance figure. Activity should pick up on Wednesday as Bernanke testifies and the
U.S. prints CPI and Retail Sales data.
Technically speaking, the S&P futures face topside technical barriers in the form of intraday highs and the psychological 1200 level. As for the downside, the S&P futures have multiple uptrend lines serving as technical cushions along intraday and previous April lows. Additionally, the psychological 1175 level could continue to serve as a solid technical cushion over the near-term.
Price: 1193.00
Resistances: 1193.60, 1195.10, 1197.05, 1198.25
Supports: 1191.05, 1188.05, 1186.55, 1185.05, 1182.95
Psychological: 2010 highs, 1175, 1200
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