News that an agreement between the European Union and Cyprus had been reached over the week-end, is helping to underpin the June E-mini Dow Jones Industrial Average shortly ahead of the opening. At least over the short-run, it looks as if Cyprus is going to dodge a financial crisis that could’ve weakened the global equity markets.
Without any major economic reports today, investors are likely to milk the good news out of Cyprus as long as they can. The Euro may be a good indicator for stock traders today since there are still problems in the Euro Zone that could drive investors out of higher-risk assets. The problems include political uncertainty in Italy, an economic slowdown in the Euro Zone and of course Cyprus.
The markets are closed on Friday which could mean thin trading conditions and higher than normal volatility.
Technically, overnight the June E-mini Dow Jones Industrial Average posted a new contract high when it crossed over the March 15 top at 14480. The next challenge is the uptrending Gann angle from the December 31 bottom at 12700. This angle comes in at 14524. Crossing over to the bullish side of this angle will put the market in a position to rally further. On the downside, an uptrending Gann angle at 14321 is solid support, followed by last week’s low at 14269.
The key today is the follow-through rally. Investors want to see new money coming in to continue to drive the market higher.