EURO DEBT DEAL AND STRONG GDP REPORT GIVE BIG BOOST TO GLOBAL STOCKS -- EUROPE LEADS RALLY -- DOLLAR DROP BOOSTS COMMODITIES AS BONDS DROP -- S&P 500 IS TESTING 200-DAY AVERAGE
EURO DEAL GIVE GIVE BOOST TO EUROPEAN MARKETS ... The overnight announcement of a Euro debt deal is giving a huge boost to global stocks this morning. The biggest gains are in Europe. Chart 1 shows the Euro surging 1.6% to move back above its 200-day average. Chart 2 shows the German DAX Index up more than 5%. Other European markets are up similar amounts. With Europe celebrating, other financial markets are behaving in a predictable way. The U.S. Dollar is falling while U.S. stocks are opening sharply higher. Commodities are also rallying with biggest gains being seen in economically-sensitive oil (+3%) and copper (5%). Bond prices are trading lower as stocks rise. Today's early trading has the makings of a very positive day if the markets can continue their momentum through the rest of the day.
(click to view a live version of this chart)
Chart 1
(click to view a live version of this chart)
Chart 2
FALLING DOLLAR BOOSTS COMMODITIES BUT HURTS BONDS ... Chart 3 shows the UUP gapping lower this morning. That's giving a boost to commodity markets. Chart 4 shows the Commodities Tracking ETF (DBC) gapping up 2% and trading above its 50-day line. Bond prices are dropping. Chart 5 shows the 20-year T-bond ETF (TLT) trading below its 50-day line.
(click to view a live version of this chart)
Chart 3
(click to view a live version of this chart)
Chart 4
(click to view a live version of this chart)
Chart 5
DOW CLEARS 200-DAY LINE...SPX IS TESTING... Today could be an important day for U.S. equities as well. The Dow Industrials and Nasdaq markets are trading above their 200-day averaages. Chart 6 shows the S&P 500 in the process of testing that important resistance line. Needless to say, a decisive close above that line would be a positive sign for the market. Although stocks are off to a very strong start, a lot is rising on how they close the day.
