Analysis:
Yesterday's Analysis predicted that "the market will trade in a range as its breakaway from 1,228 is checked by lingering concerns about European economic strength and China's imminent tightening of monetary policy." Today the market traded in an eight-point range and settled higher. Looking ahead to tomorrow, the International Trade deficit will widen to $45 billion, caused by rising consumer demand and higher crude oil prices, and Consumer Sentiment will drop to 71 due to continued slump in home values. China's central bank will increase interest rate in the next seven hours in an attempt to curb rising inflation, which event the market has not fully discounted. As a result, the market will retreat while the dollar continues to strengthen against the Euro.
Strategy:
Hold short at 1,217
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