Will The Indexes Break Resistance Today?

February 16th, 2010

The big question this week is: Will the indexes break resistance? This morning stock futures are higher after a long holiday weekend. Earnings and economic reports throughout the option expiration week are likely to be scrutinized to see if the U.S. economy is continuing to improve despite concerns about overseas growth.

European markets rose following new plans by European Union leaders to push Greece to contain its growing debt problems. European leaders on Monday said Greece will have another month to come up with a plan to reduce its deficit, but again pledged to support the debt-burdened country.

Oil prices also joined a broad-based rally in commodities, as the dollar edged lower against rival currencies while Gold futures gained $24 to $1,114 an ounce.

The junk bond ETF HYB is continuing to sell off this week as investors are selling out of “junk” bonds at the fastest rate since September 2005, in the latest indication that concerns over sovereign debt are spreading to other credit markets. Nearly $1 billion was withdrawn from US funds that hold high-yield corporate bonds (junk bonds) in the past month.

The HYG which is the most widely tracked ETF shows us how much investor’s are selling this off right now. Good support isn’t until much lower.

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