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Current Futures: Dow -23.00, S&P -3.40, NASDAQ -2.50
The European session saw very strong momentum, even though the economic calendar was rather light. Moreover, the implied volume was stronger than the average of the last few weeks of trading, something that denotes traders’ interests in these moves.
The U.S. futures and the European markets posted very strong declines in the first few minutes after the London open, but as the market headed towards the U.S. session, the overnight markets started to recover some of these declines. Shortly after the London open, the S&P futures plunged almost 1% in about 30 minutes, breaking below a trend-line that has held the index since 2009.07.16. However, right now the S&P futures are back near the 970.00 area, the same place where the futures market was trading ahead of the European open.
The German Dax and the U.K. FTSE plunged in the first few minutes of trading, but then turned around and recovered the ground loss earlier, even picking up additional points. The reversal in the European markets came only after the German company Bayer reported better than expected results throughout the second quarter. Earlier in the day, Asian markets snapped an eleven-day rally, while the Shanghai stock market plunged nearly 5%, the most in the last few months. TheLFB-Forex.Com Trade Team noted that the Chinese stock market appears to have a bubble like behavior, since the current valuation compared to the reported earnings sits at 35, more than double the U.S. and European markets. Also in China, the China State Construction company surged 90% in its first day of trading, after being the largest IPO in a year and a half.
Overnight, the U.K. FTSE advanced 32.01 points (0.71%) to 4,560.85, while the German Dax gained 69.44 points (1.34%) to 5,244.18.
Crude oil for August delivery was recently trading at $66.50 per barrel, lower by $1.70.
Gold for August delivery was recently trading lower by $3.70 to $938.00.
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