The September E-mini S&P 500 retraced all of yesterday’s range to finish higher for the day. The current chart pattern suggests that this market could run into resistance at 50% of the break from the 1016.00 top at 995.75.
Equity markets were up across the board as buyers stepped in overnight following better than expected economic news from Germany. An improvement in German investor confidence renewed thoughts of a global economic recovery. In addition many investors felt yesterday’s break was overdone.
September Treasury Bonds and Treasury Notes finished lower because of the rise in equity markets. Investors felt a little better about an economic recovery, leading them to lighten up their long Treasury positions. Some traders had gone long Treasuries for protection during Monday’s break.
The U.S. Dollar was under pressure all day following the release of better than expected German investor confidence news and a report showing the U.K. inflation picture was not as weak as originally estimated. These events helped trigger strong rallies in the September British Pound and September Euro. The September Canadian Dollar also rallied triggered by higher equity and energy prices. The September Japanese Yen fell as demand for higher yielding assets rose slightly.
December Gold finished higher as the Dollar weakened. December Copper closed lower. This came as a surprise as many investors thought this market would rally because of better than expected economic news. The action today could be an indication that demand will not be as strong going forward.
Speculators drove September Crude Oil higher on Tuesday. Traders bought crude oil in anticipation of greater demand because of the developing global economic recovery.
