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Market is finding difficulty in breaching resistance at 1200 in the S&P 500, level from which the market crash of last monday started.
This is a pretty obvious level from which short sellers can re-enter the market and bull who bought at the lows to cover their positions.
At the moment, the sell volume is low and the news from Europe have been less negative which is a positive. The market was fairly positive for a while but it reversed hard after Standard & Poors lowers its growth forecast for the US economy for the next three years. It also highlights the possibility of default as a rising concern.
Today in the morning we received data on the Producer Purchases Index (PPI) which is a measure of inflation. The reading was higher than expected with an increase of 0.2% vs 0%. Higher inflation doesn't bode well for companies margins and lower the possibility of another Quantitative Easing program in the short term.