Morning rally to close the gap stayed below key 2620 level (resistance). Its inability to break above 2620 level started a sell-off that gained momentum after the release of bad Chicago PMI and Phily Fed number.
There were several other reasons for the selloff on Thursday, including the downgrades of banks by Moody's and the failure to announce any new quantitative easing by The Fed at their meeting yesterday, at least not yet. The PMI and the Phily Fed numbers were just an excuse to sell. Unless the shorts decides to cover ahead of the weekend the sell-off should continue.
Key Support-Resistance Level for Friday is 2560.
- Consolidation above, targeting 2585. If the rally is strong, next resistance is 2600.
- Below 2560 implies the sell-off continues, next support down is 2540. If that level breaks, next support is 2510.
European Debt crisis continues to intensify, with bank run in many European countries
