The Markets Are Tense Ahead Of Economic Data

Bernanke’s encouraging words didn’t have the same bullish affect yesterday, as investors cashed in on recent gains. The S&P500 jumped higher at the start of the session, but quickly lost its steam, closing with a mere loss of -0.05%. The U.S government’s recent stimulus plan for the auto industry, “cash for clunkers”, came to an end yesterday affecting auto stocks and having a mild affect on the intraday session. Ford dropped by 4.26%, while Daimler finished with a loss of -1.97%.

One must note that the cash for clunkers plan helped the auto industry and their stocks as it allowed car owners to trade in their old, less fuel-efficient cars in exchange for more efficient ones. Many investors are now waiting to see whether the sector can now hold up on simple supply and demand.
From a technical point of view the S&P500 managed to hold around recent break-out levels after a four day rally. When observing the chart more thoroughly one can see that yesterday’s candlestick presented a bearish shooting start like candle, one that could lead to further consolidation around current levels. Even though economic data could have a positive impact on the markets today a slight retracement wouldn’t be surprising, especially after last week’s rally.



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