Short and sweet commentary tonight as last week really didn’t resolve much. The S&P500 met tough resistance and was rejected twice at the 1298-99 level. Though the index made a higher low and higher high, it closed Friday just a few points above its 200-day moving average at 1263, which also coincides with the week low. This, along the prior week’s low of 1258 and the March low of 1249 are key support. We wouldn’t be surprised to see them tested before the austerity measures are voted on in the Greece parliament.
The Asian markets bounced after a multiple week losing streak with the Japan now looking in the best shape making a higher low, higher high, and is the only major index above its 50-day moving average. There was a lot of negative press over the weekend about China’s economy and this will continue to weigh on the global markets, in our opinion.
Almost every commodity got hammered last week with the intervention from the IEA in the crude oil market. We think the correction has a way to go and are steering clear of most commodities for now. It’s hard to believe, but crude oil is now pretty much flat for year and cash wheat is down almost 15 percent.
Next week will be dominated by the European Debt Crisis with all eyes focused on the Greek government’s ability to get its austerity program approved. Contagion fears could really roil the markets so monitoring the major bank stocks of Spain and Italy, for example, is an exercise worthy of your attention. We’re expecting some pretty decent volatility next week. Buckle up!
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