Wall Street’s Earlier Positive Vibes Reverse as Fed Decision Approaches

January 23rd, 8:00 pm by Sam

(eToro Blog) Wall Street had earlier rallied higher on investor hopes that Greece would reach an agreement with private bond holders that would prevent the country from defaulting on the debt which comes due in March. Despite some initial pull back for the Euro-Dollar as the trading day commenced, the EUR/USD pair has broken through resistance at 1.3000 and continues to claw higher, reaching an intraday high of 1.3047. It has most recently traded at 1.3039, and sentiment on the OpenBook is predominantly bullish. Guru pyruss commented (on his wall) that he’d like to measure the bull’s mettle, though he wonders too if it’s not a “bull trap.” A review of his open trades reveals that this surprise rally eluded him as only EUR/USD shorts emerge, and a review of his history shows his two recently closed profitable trades may have been premature.

Last week’s mostly positive U.S. economic data is still fresh in the minds of traders this morning, though there is little of import on the U.S. economic calendar today. As a result, stocks are eyeing Europe for direction and most analysts agree that Europe’s headlines will decide Wall Street’s future for the remainder of the trading day. Currently, there are reports that the Greek government is moving closer to a deal with private bond holders. The Eurozone finance ministers also are meeting today in Brussels to hammer out measures to force member countries to limit budget deficits to 0.5% of GDP.

Research in Motion Ltd (RIMM), the makers of the Blackberry phone, captured headlines today when the company announced that the company’s co-CEOs, Jim Balsillie and Mike Lazaridis are resigning as the company fights loss of market share to other device manufacturers. Shares of the company were down 5.82% in early morning trading.

OpenBook trader anugiu continues to hold on to hold several positions with triple digit gains. The SPX500 positions have an average gain of 335% and the NSDQ100 positions have accumulated an average gain of 272%. Trader drangie, who is a short term trader (unlike anugiu), was busy this morning scalping and booking several profitable positions on the SPX500; the trader looked for opportunities to buy SPX500 near 1,318 and sell near 1,316 before the U.S. open. Trader dedenfd was also busy this morning capturing 12.5% gain on SPX500 and 8% gain on NSDQ100.

With the Fed Rate decision two days away, traders on OpenBook are primarily bullish on SPX500 with average limits at 1,400 and stops at 1,290. Earlier, all of the U.S. equity markets had been higher but they have since retreated; as of this writing the DJIA is down 24 points, the NASDAQ 6 and the S&P500 is almost 2 points lower.