After starting out the day strong, equity markets have been retreating into the afternoon following comments from the Bank of Canada and U.S. Fed Chair Bernanke that suggested while there have been signs of improvement in the economy, there remain risks and it appears that neither central bank considers their economic situation to be strong enough to take the pedal off the metal as of yet.
As a number of indices had approached significant resistance levels just before these comments, it appears that there wasn’t enough there to give bulls the conviction to push indices through. This failure to break out may have also spurred some profit-taking off recent gains as the day has progressed. Major resistance levels for indices appear near 8,900-9,000 for the Dow Industrials (US30 CFD), 950 for the S&P 500 (SPX500 CFD), 1,550 or 1,600 for the NASDAQ 100 (NDAQ100 CFD), 635 for the S&P/TMX 60 (Toronto60 CFD) and 10,600-10,700 for the S&P/TMX Composite.
Commodites have also started to reverse course, perhaps on a readjustment of global recovery estimations and a general strengthening of the U.S. dollar in today’s trading. Copper has slipped back under $2.45/lb but remains above $2.40. U.S. crude has fallen back under $65.00/bbl with initial support in the $64.00-$64.25 range. Gold has been trading just below its key $950/oz resistance level. Grains have been under pressure today with corn sliding toward a possible test of $3.00/bushel support and soybeans retesting their key $10.00/bushel level.
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