The Cable is stabilizing from the psychological 1.40 area and is rising back above our 1st tier downtrend line.  Therefore, we could see some solid near-term gains with a retest of our 2nd tier downtrend line.  The strength of the Cable comes on the heels of a better than expected Services PMI. 

Furthermore, the S&P futures are fighting to stabilize around 700, which in turn is edging the GBP/USD back into the bottom-end of the February trading range.  Don't forget a strong positive correlation exists between the Cable and U.S. equities due to Britain's heavy reliance on the financial sector for GDP growth.

The EUR/USD continued its selloff on Tuesday as the S&P futures dipped below 700. However, the EUR/USD found support on our previous bottom-end support of 1.2458 early Wednesday.

Euro traders are holding onto their breath waiting to see if U. S. equities manage to stabilize from present levels. If this is the case, then 2008 lows could hold for the time being. However, if the U. S. economic data is catastrophic and a sharp selloff ensues, we very well may see the EUR/USD test the patience of October 2008 lows.

The biggest concern for the EUR/USD, not including U. S. equities, is the condition of Eastern Europe. Many of the EU's largest banks have significant exposure to Eastern European economies.

Crude futures have surged through our 2nd tier downtrend line and are now climbing above our near-term uptrend line.  It seems crude has put in a nice bottom, and we could see a retest of February 27 highs shortly.

The OPEC supply cuts are having their desired effect on price, which could be confirmed further by the Crude Oil Inventories release this afternoon.  While the medium-term downtrend is far from over, Crude futures could easily continue their solid near-term rally.

The mid-January to mid-February trading range will provide a true test for the futures. Fundamentally, we find supports of $42.22/bbl, $41.75/bbl, $41.35/bbl, and $40.60/bbl.

Gold sold off further on Tuesday despite equities finishing the session relatively flat. Gold has dipped below our 2nd tier uptrend line, but still has the psychological $900/oz area and our 1st tier uptrend line to rely on.

Gold's correlation with equities has been a bit out of whack over the past few sessions, which could indicate healthy fundamental profit-taking.

On the other hand, if Gold closes below $900/oz. and our 1st tier, we could witness a heightened selloff in Gold coupled with a strong rally in equities. Considering the remaining fundamental supports, we maintain our positive outlook on Gold trend wise.

Fundamentally, we find resistances of $922.49/oz, $930.76, $937.81/oz, and $945.57/oz.

The 30 Year T-Bond futures are weakening Wednesday, but found temporary support on our 124.98 level. If the futures are to fall below February lows, we anticipate a heightened near-term selloff. Since equities and treasuries are normally negatively correlated, the lack of movement to the upside in the 30 Year with equities at critical lows shows the downtrend is intact.

Furthermore, the fact the 30 Year futures are declining with equities shows investors are concerned the demand for government debt is insufficient to satisfy supply. As a result, yields are rising and price falling, placing exorbitant downward pressure on the 30 Year T-Bond futures.