Daily Market Review for 27/05/2011 by SolidityBrokers.com

The stock market closed higher Thursday as technology and consumer discretionary stocks countered the weight of weaker-than-forecast jobless claims and first-quarter economic growth.

The Dow Jones Industrial Average finished up 8.10 points to close at 12,402.76. The Nasdaq Composite rose 21.54 points to close at 2,782.92 while the S&P 500 Index rose 5.22 points to 1,325.69, with consumer discretionary and telecoms the best-performing sectors.

Before the opening bell, the Commerce Department said the U.S. economy expanded at the same 1.8% rate it had earlier forecast for the first quarter. Economists had expected the government to revise the gross-domestic-product growth rate to 2.2%. Second-quarter GDP will be 2.25% or 2.5% rather than 3%, so the Fed won’t raise interest rates any time soon, so there’s no place to put money, and we go back to the first equation of corporate profits are still strong.

Earlier in the day, the Labor Department said the number of people who filed applications for unemployment benefits rose by 10,000 to 424,000 in the week ended May 21. Economists had expected a decline. Another obstacle for stocks were comments from Eurogroup head Jean-Claude Juncker, who reportedly said the International Monetary Fund may withhold its portion of aid to Greece next month because of a lack of a refinancing guarantee from the country.

Today’s Important Economic Announcements (GMT)

8:00 AM EUR M3 Money Supply y/y

9:30 AM CHF KOF Economic Barometer

12:30 PM USD Core PCE Price Index m/m & Personal Spending

1:55 PM USD Revised UoM Consumer Sentiment

2:00 PM USD Pending Home Sales m/m


The single currency traded in a volatile manner on Thursday, having staged initial rally from Asian morning low of 1.4068 to a session high of 1.4206 in New York morning on speculation that China would increase its purchases of European bonds together with greenback’s broad-based weakness after the release of weaker-than-expected U.S. GDP data before nose-dived to as low as 1.4067 due to comments from Eurogroup head Jean-Claude Juncker, who said ‘International Monetary Fund may not release next tranche to Greece next month’ before recovery was seen later. EUR/USD remains in downtrend from 1.4939, the price action from 1.4048 is treated as consolidation of downtrend. Expect the downtrend to continue later today.

Stop Loss: 1.4284

Take Profit: 1.4131





USD/CAD moved sideways in a narrow range between 0.9743 and 0.9816. The price action in the range is treated as consolidation of uptrend from 0.9444. Further rise is still possible and next target would be at 0.9900. Support remains at the uptrend line from 0.9513 to 0.9639, only a clear break below the trend line could indicate that lengthier consolidation of uptrend is underway, then pullback to 0.9650-0.9700 area could be seen. As always, when trading this pair you should also follow the precious metals and crude oil. Any major change in price will likely affect the loonie while raising volatility at the same time. Our forecast calls for further weakening during the next 24 hours.

Stop Loss: 0.9770

Take Profit: 0.9737




Crude Oil

Prices took out the top of a descending triangle pattern, exposing the 38.2% Fibonacci retracement of the drop from the May 2 high at $102.35. A break above this boundary exposes the 50% level at $104.73. Broadly speaking, anything shy of a daily close above the latter boundary keeps the overall structure broadly bearish. Near-term support stands at the psychologically significant $100 figure. The correlation between oil and the S&P 500 remains firm, putting the spotlight on tomorrow’s revised first-quarter US Gross Domestic Product figures. Risky assets seem to be treating the adjustment as a positive development despite its implications for the Fed rate hike outlook. On balance this points the way higher for crude prices in the day ahead. Our target is set at $102.00

Stop Loss: 99.79

Take Profit: 102.00



Published by www.SolidityBrokers.com