After trading in a tight and narrow range, December NASDAQ futures broke out to the downside following weaker than expected news from Apple Computer. Futures are trading lower in the overnight markets. This is expected to flow into the morning session.
Uptrending Gann angle support is at 2037.00 on the daily chart. This angle has held as support since the main bottom was formed at 1741.00 on August 27. A break through this level could trigger the start of an acceleration to the downside.
The December Euro finished down on Monday after rebounding from its low following early session weakness. The initial break in Monday’s session was follow-through selling following Friday’s closing price reversal top. This down move was short-lived because a not so friendly U.S. Industrial report triggered a short-covering rally which lasted most of the day.
Besides the short-covering rally, nothing happened that would change the developing bearish reversal formation. As long as last week’s top at 1.4159 remains intact, this market could begin a correction which takes it back to 1.3373 to 1.3187.
The last swing bottom is 1.3775. A break through this level will turn the main trend to down. It could also trigger the start of an acceleration to the downside.
Shortly after U.S. equities closed, IBM and Apple Computer, Inc disappointed traders, sending U.S., stock index futures lower. Traders may use this weakness as an excuse to book profits in their long Euro positions. Weakness in the stock market could also fuel a break in the Euro because it may lead to liquidation of higher risk assets.
