Monday, February 8, 2010

The S&P futures are back in the green Monday as major Dollar pairs settle in the wake of last week’s intense pullback in the risk trade.  The EUR/USD, GBP/USD, and AUD/USD are all stabilizing this weekend as the weekend gave investors an opportunity to settle their nerves and assess the damage.  Furthermore, we’ve received several comments from global policy makers emitting confidence concerning the state of the global economy.  Trichet reassured leaders at the G7 summit that the ECB and EU have Greece’s deteriorating fiscal situation under control.  It seems officials are attempting to combat the negative psychological impact from last week’s debt scares in Greece in Portugal.  However, there remains a legitimate concern and last week’s selloff in the risk trade sent a clear message that investor uncertainty is at a heightened level.  That being said, investors should keep a watch on the news wire for further developments regarding Greece and other troubled EU economies.  Meanwhile, the data wire will be relatively quiet for the next 48 hours, providing markets with an opportunity to stabilize ahead of upcoming fundamental and psychological developments.  Australia and China will reignite the data wire during Wednesday’s Asia trading session with the release of Australia home Sales and China’s Trade Balance.  Additionally, the BoE will release its Inflation Report followed by a speech from King.  The U.S. will also release its Trade Balance data that session accompanied by a testimony from Bernanke.  Therefore, equities and currencies may not remain calm for too long with key events coming during the middle of the week.

Technically speaking, to the topside the S&P futures face multiple downtrend lines along with the psychological 1075 and 1100 levels.  As for the downside, the S&P futures have 2/5 and 2/4 lows serving as technical cushions along with the psychological 1050 area.

Price: 1064.50

Resistances: 1064.75, 1066.75, 1069.25, 1073.50, 1077

Supports: 106`.75, 1059.75, 1057.75, 1055.75, 1050.75

Psychological: February highs and lows, 1100, 1075, 1050

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