Technical Outlook Favors More Selling

On May 22, 2012 by TradingDesk

Global markets had a strong performance Monday, as hope was renewed that policy decisions could avoid a Greek exit of the Euro zone, and marked the first positive trading day in 7 for many equities. The momentum carried into the overnight trading session with both European and Asian shares rallying, although the mood was tempered by a downgrade of Japan’s credit rating by Fitch, and by another expensive Spanish debt auction.

Energy prices joined in on the rally Monday, but have been held in check today on news that Iran is ready to sign an agreement with the IAEA on its nuclear production, and separately plans to build a new giant export terminal for its oil production. While the pop in prices Monday served to ease a severely oversold condition in refined products, which had each dropped more than 30 cents over the past 3 weeks, the technical outlook continues to favor more selling.

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