The S&P 500 has a confluence of targets in the 1250 area with the prior interim low, a trendline connecting the March 2009 low with the August 2010 lows, and the 200 day simple moving average.
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| S&P 500 Index Daily |
The Russell has a similar zone in the 770 area.
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| Russell 2000 Index Daily |
"Finally, it appears that sense and sensibility are returning to the forex markets as the market and as traders/investors are beginning to pay heed to the problems that are central to what is happening to Europe as a whole and to Greece in particular and the PIIGS in general. Support levels that should not have held in the case of the EUR or Sterling are finally not holding. Ideas of Greek solvency, which were and are nonsense, are suddenly coming again to the fore. The notion that Greece is insolvent when it has borrowed hundreds of billions of EURs in the past to paper over its fiscal circumstances are being embraced, and are especially embraceable when Greece is going to be granted...by someone or by some international entity, be it the ECB or the IMF or the individual other nations of Euro-land...even more hundreds of billions of EURs as a bailout, when the first hundreds were unrepayable making the following hundreds of billions even more so. Yes, finally rationality is returning to the markets."
He went on to reiterate his call from Wednesday that "we are about to turn violently bullish of the dollar, or perhaps more properly we are about to turn violently bearish of the EUR and all things European. We simply need a technical sign to do so."
Nice to have someone like that on my team. I've been reading his newsletter since I was like 14.
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| EUR/USD Hourly |
Since we've been watching the EUR/USD and stock market correlations, here is what has happened today. I'm now thinking the reversal of the correlation was simply a distortion, much like the EUR's rally itself.
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| EUR/USD vs. S&P 500 Index Daily |