Risk Is Back On

On March 8, 2012 by TradingDesk

Risk is back on this morning, as hope springs eternal that the Greeks have it figured out. Stronger than forecast manufacturing data out of Germany has the Euro rising nearly 1%, pushing the dollar lower and most stock and commodity markets are rallying along with it. A 3rd straight week of slight rises to initial unemployment claims in the US has tempered the move over the past 20 minutes, but most markets remain in the green.

Yesterday’s action was driven largely by a WSJ report suggesting that the FED had a new “sterilized” version of QE ready to inject the next dose of free money into the financial system. While the news is unsubstantiated, it does point clearly to the fact that FED policy may provide better market direction than anything, a full 3 years after their first round of Quantitative Easing in March of 09.

Energy prices used the stock rally to get back above their bullish trend lines, and have followed through with more modest buying today. Despite the bounce, technical studies are still in neutral territory, and there are potential Head and Shoulder topping formations in both products. Expect a choppy day of trading as the headlines from Europe continue to pour in.

CLICK HERE for a PDF of today’s chart



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