Dartline™ First Look – morning directional planner

December 17, 2009, 7:00 am … The Standard & Poor’s 500 index futures down 5.90 to 1099.80, as the FTSE 100 index of leading British shares was down 31 points, or 0.6 percent, at 5,289.26, Germany’s DAX fell 28.08 points, or 0.5 percent, to 5,875.35 and CAC-40 in France was 22.32 points, or 0.6 percent, lower at 3,853.50. Earlier in Asia, the Nikkei 225 stock average shed 13.61 points, or 0.1 percent, to 10,163.80, and Hong Kong’s Hang Seng slid 264.11 points, or 1.2 percent, to 21,347.63. South Korea’s Kospi dropped 1 percent to 1,647.84 and Shanghai’s market tumbled 2.3 percent to 3179.08. Markets in Taiwan, Singapore and Indonesia also fell. Australia’s market bucked the trend, adding 0.2 percent. …Noise from Fed continues to be accessed. Though the Fed reiterated its pledge to keep interest rates near zero, it noted improvements in the economy and detailed the beginnings of a plan to dismantling a number of its extraordinary lending measures in 2010. The news stoked speculation the central bank might increase interest rates sooner than expected, leading many investors to shift back into the dollar and out of stocks. Indeed, low borrowing costs have contributed to a nine-month bull run in stocks and the sharp fall in the dollar this year. Cheap dollars were used to buy potentially higher-yielding assets like stocks, commodities and foreign currencies. Moreover, the dollar rebound confirms that many of The Fed’s liquidity providing measures will be unwound early next year — not true but makes traders nervous. It’s the high unemployment stupid! … The U.S. dollar surged to a three-month high against a currency basket on Thursday, while the euro tumbled on fresh concerns about Greece’s waning fiscal health. In thin pre-holiday liquidity, the euro spun to its lowest against the dollar since early September, picking up pace after breaking strong support at $1.4500 and hitting stop-loss sell orders to take it below the $1.4400 mark. Concerns about fiscal troubles in some euro zone countries gathered pace as Greece suffered the second downgrade of its credit rating in a week on Wednesday. S&P cut its rating one notch to BBB-plus from A-minus. … Oil prices fell, with benchmark crude for January delivery down 36 cents to $72.30. On Wednesday, the contract was up $1.97. …  Remain focused on “Near term test  is in order for the Standard & Poor’s 500 index to close above 1,114.11  and confirms upside bias.” The failure of the index yesterday to close above 1,114.11 and stronger dollar suggest trading pressure to the downside.  Use support for the Standard & Poor’s 500 index at 1094.35 as recent range-bound activity makes it prudent to focus on the leaders for the best trading opportunitie., while reducing laggards and creating a 25% cash position.