A sharp sell-off in Asian stocks overnight triggered by a weaker than expected Japanese growth report renewed interest in lower-yielding assets. This action fueled weakness in higher yielding assets such as equities and foreign currency markets while igniting a flight to lower yielding markets such as the Dollar and Treasury instruments.
The September E-mini S&P 500 turned down this morning following a break through the last swing bottom at 990.00. The next minor downside support level is 965.25. If this bottom is violated there may be a correction to 940.75 to 923.00. Traders should be aware that the high volatility could trigger a strong short-covering rally before the down trend resumes.
The Dollar continues to strengthen as the equity markets weaken with the September British Pound and the September Euro getting hit the hardest. Repatriation and demand for lower yielding assets is helping to boost the September Japanese Yen.
All metal futures contracts are trading lower. December Gold and December Silver are trading weaker because of the strong U.S. Dollar. Concern over the recovery in the U.S. and China is triggering a break in December Copper on the thought that demand will drop if the economic recovery slows.
The thought of a drop in demand for energy is also triggering a sell-off in September Crude Oil. The weak Euro is also a contributing factor. Concern about a slowdown in consumer spending is contributing to the weakness in September Gasoline.
September Treasury Bonds and Notes are trading better at the midsession as money is leaving the equity markets for the safety of the lower yielding Treasuries. Traders are also reallocating their investments from equities to Treasuries to lock in attractive yields.
Grain and Soft markets are trading sharply lower on the perception that a stronger Dollar will hurt demand for these commodities. November Orange Juice is also trading lower as the hurricane hitting Florida is expected to miss the orange juice orchard.
The September E-mini S&P 500 turned down this morning following a break through the last swing bottom at 990.00. The next minor downside support level is 965.25. If this bottom is violated there may be a correction to 940.75 to 923.00. Traders should be aware that the high volatility could trigger a strong short-covering rally before the down trend resumes.
The Dollar continues to strengthen as the equity markets weaken with the September British Pound and the September Euro getting hit the hardest. Repatriation and demand for lower yielding assets is helping to boost the September Japanese Yen.
All metal futures contracts are trading lower. December Gold and December Silver are trading weaker because of the strong U.S. Dollar. Concern over the recovery in the U.S. and China is triggering a break in December Copper on the thought that demand will drop if the economic recovery slows.
The thought of a drop in demand for energy is also triggering a sell-off in September Crude Oil. The weak Euro is also a contributing factor. Concern about a slowdown in consumer spending is contributing to the weakness in September Gasoline.
September Treasury Bonds and Notes are trading better at the midsession as money is leaving the equity markets for the safety of the lower yielding Treasuries. Traders are also reallocating their investments from equities to Treasuries to lock in attractive yields.
Grain and Soft markets are trading sharply lower on the perception that a stronger Dollar will hurt demand for these commodities. November Orange Juice is also trading lower as the hurricane hitting Florida is expected to miss the orange juice orchard.
