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The Dow Futures Report

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Equities Srage Volatile Session

Thu, Mar 26 2009, 06:12 GMT
by Paul Brittain

Alaron

EQUITIES STAGE VOLATILE SESSION. SWING BETWEEN GAINS AND LOSSES AS ECONOMIC DATA YIELDS TO POOR AUCTION RESULTS, RALLY BACK ON CLOSE FROM INSTITUTIONAL BUYING

US Equities kept traders on their toes Wednesday as seemingly unforeseen waves of volatility kept hitting the markets today, supported by data influenced changes in sentiment. Early gains broke to test new highs for the recent recovery from mid 1990 levels. These gains were fueled by early reports showing the first rise in US durable goods in six months and a better than expected reading on new home sales. Upward momentum appeared to stall again as S&P 500 futures tried to test the 820 level again. As this level failed, the markets were rocked by a poor reception for a record $34 billion of US 5 year notes, particularly as foreign buyers of US debt were conspicuously absent from bidding. This drop in global confidence for the US government’s ability to fund and lead the economy out of its worst financial crisis in decades sent equities decisively lower, running a number of stops and spurring a wave of covering long positions from Monday’s major in rally in the equity markets.

As the markets seemed poised to set up for a test of newly entrenched support levels, a wave of institutional buying came into the markets in the closing hour of the equity session, allowing the major indices to close near their opening ranges with some slight gains. Financials were one of the most volatile sectors today swinging between gains and losses. The sector staged a massive upswing in the closing hour, with JP Morgan rallying 10%, BOA up 6.7%, Wells Fargo up 5.9%. NASDAQ futures closed slightly lower as the telecom sector fell on a downgrade of ATT’s debt.

Technically, June Dow futures made an attempt to test resistance at 7816.
Volatility remains a significant challenge to posting technical measures. Support for the Dow remains in place at 7260. Look for upward momentum to find initial resistance at 7894. Downward gaps should find a support level at 7417.

Published on  Thu, Mar 26 2009, 06:20 GMT