Monday was a lackluster day as a slight recovery off some overnight lows offered bulls strong technical confirmation of what could have been considered a questionable Thursday pre-holiday rally.  This market is showing some signs of momentum failure, but today was actually a pretty strong move as a congestion near the highs is likely setting up a strong fresh high this week.  I continue to try an pick up value in overnight dips on the mini-S&P by buying early and placing a stop below the overnight low.  This is a technique that I feel has worked well in recent action.  For specific entry, stop and profit target point sign up for the PitGuru premium service for our trade recs. 

The euro held what could eventually be considered a key double bottom support.  This critical area will be a focal point for a potential upcoming trade alert should this price point get tested again.  Remember, the euro is riding a wave after a major spike that occured after the recent  Fed meeting.  The Fed showed their intention to dilute the dollar through treasury buy-backs.  This is long term bearish the dollar, but the question becomes is it the deal breaker?  Does the world really care about the U.S. printing money to cover some of its debts?  The answer is yes.  The dollar only has one bailout.  If the ECB or UK do similar buybacks this will diminish the effects of the Fed’s recent move as it becomes more of a global dilution rather than a U.S. one.  The market likely realizes this and the ebb and flow of the euro should be based on the expectation of the market that the European powers that be will take similar action. 

Tomorrow there should be significantly more action as we see some critical reports coming out like the PPI and Retail Sales.  I like a positive surprise on retail sales as expectations are dreadfully low and some recent March economic stats suggested a shift on some spending habits.  This may offer the boost to 870 the S&P needs to regain momentum.  - Financials PitGuru, Frank LaMantia

Disclaimer: Past performance is not indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors.

Euro Currency Daily

Tags: euro currency, Financials, producer price index, retail sales, S&P500

This entry was posted on Tuesday, April 14th, 2009 at 1:59 am and is filed under Financials. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.