Are Stocks Set To Bounce?
Stocks and the greenback futures rallied from
oversold conditions as war jitters eased after chief U.N. weapons
inspectors Hans Blix reported increased cooperation from the Iraqis. Meanwhile
bonds, gold, and oil took a back seat today as a war with Iraq is now less
likely or at least delayed.
Both the Dow and S&P futures finished higher after declining for four
straight sessions. Meanwhile Nasdaq futures found support near its 61.8%
retracement from its October lows. News that Iraq will “unconditionally” allow
U2 surveillance flights, and proposed laws banning certain weapons turned stock
futures around after some early morning weakness. Stock index futures also got a
boost as an investment strategist from Banc of America Securities raised his
recommended equity holdings to 75% from 70%. As long as threats of war continue
to ease, stocks may have further to bounce. In addition there is some positive
divergence in RSI and stochastics. At the close, the March S&Ps
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gained 5.30 to 836.00, the March Dow
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March Nasdaq 100 gained 9.50 to 969.Â
The dollar index rose for the third straight session and strengthened against
the yen and the euro. Easing tensions of war brought the greenback up to near
last Monday’s high and just below its 38.2% retracement from its Jan. 2 high.
The dollar also gained today as the traders speculated that Fed Chairman
Greenspan will have something positive to say when he testifies before the
Senate Banking Committee tomorrow. The March dollar index
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to 100.48 and the dollar is now 1.07320 basis the March euro.
Treasury futures declined today as increased cooperation from Iraq moved
threats of war to the back burner. Treasury futures also declined as the
government will begin to auction off $42 billion of treasuries over tomorrow and
Wednesday. The March 30-year contract
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March 10-year contract
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Crude oil backed off from its two-year high today as Belgium, France, and
Germany vetoed a proposal to arm Turkey with missiles in case of an attack from
Iraq. March crude
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Gold futures also back off as threats off war cooled today. After hitting a
seven-year high last week, the metal has seen five straight sessions of
declines. Gold has also broken support at its 20-day moving average. Its next
support is at its 38.2% retracement at 361.75. April gold
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6.8 to 364.20.