DIA +.5%, SPY +.79%, QQQQ _1.95%
10-Year Treasury -9/16, yielding 4.11%
Oil +84 cents $59.59
Dollar unchanged versus euro and yen
The markets rallied today, partly thanks to a bullish investment call from Prudential Securities. Their chief market analyst recommended investors reallocate their portfolios to 100% equity exposure. In addition, Wal-Mart announced better than expected monthly sales numbers. All three markets have sold-off to technically important levels, indicating a rally is possible from current levels.
The 10-year Treasury fell 9/16 to yield 4.11%. Factoy orders increased 2.3% last month, the highest increase in a year. Continued strong economic numbers and last week’s federal reserve statement have led traders to consider reversing their opinion the economy is slowing. As a result, they are selling Treasury bond. In addition, the 10-year has been technically overbought for about the last month, indicating a correction was bound to happen at some time.
Oil rose 84 cents to close at $59.59. Oil’s price in under pressure from 2 tropival storms in the Gulf of Mexico. Oil companies have evacuated some of their personnel for safety reasons, which has decreased gulf oil production by 3.3%. Technically oil is nearing overbought conditions. However, there is still some upward room for a breach of the technically important $60/bbl.
The dollar was near unchanged versus euro and the yen. Regarding the euro/dollar trade, traders are still focusing on the interest rate differential between European and US markets. There are still rumors the ECB will cut interest rates, although they have made no official announcement regarding this possibility. High oil prices are lowering the Yen’s value versus the dollar, as traders are concerned high oil prices will hurt Japan’s recovery. The dollar is technically overbought versus both currencies which may be the reason it has not rallied further versus either currency.
