The S&P futures are logging key gains above our 2nd tier uptrend line and the highly psychological 1000 level. The futures are setting fresh 2009 after U. S. employment data showed encouraging signs for the second day in a row. Rising unemployment has been the sore thumb in America’s economic downturn. Therefore, the lower than expected Unemployment Rate and greater than expected Non-Farm Employment Change data points are giving the S&P futures enough energy to punch through 1000.

We recognize rising buy-side action today, indicating investors are backing today’s technical move. A close comfortably above previous 2009 highs would be a very positive development for the S&P futures and bodes well for the near-term. However, even if the S&P futures should get past 1020, an eventual retracement should be in the works. Let’s not get too far ahead of ourselves though and enjoy the positive developments in the S&P futures. There is not much negative we can say about the S&P’s technicals, suggesting more near-term gains could be in the works.

Though the 30 Year T-Bond futures are registering sizable declines, the rest of the S&P’s correlations are behaving strangely. The Dollar is appreciating heavily across the board while gold declines and crude moves sides. The Dollar’s appreciation is peculiar, particularly the Yen and Euro crosses. The Greenback has exhibited a negative correlation with U. S. equities throughout most of the crisis. Therefore, it is odd the Dollar reverts to a positive correlation with the S&P futures as the futures make a technically significant move above 1000. Speculation may lead one to believe that the S&P’s correlations are shifting. However, it would be premature to make such a conclusion after one day of activity. Therefore, investors should monitor the S&P’s interaction with its correlations over the next few sessions, particularly if equities should surge and the Dollar continues its appreciation.

Price: 1012.00

Copyright 2009 FastBrokers, Latest Forex News and Analysis for Forex, Bullion and Commodity Traders.

Disclaimer: For information purposes only. FastBrokers assumes
no responsibility or liability from gains or losses incurred by the
information herein contained. There is a substantial risk of loss in
trading futures and foreign exchange.