Equity markets fell sharply lower in anticipation of worse than expected corporate earnings reports. Investors are looking for any reason to get out of this market as they are now beginning to realize that the entire March to June rally was created without substance. Stock prices just got cheap and investors bought them looking for a quick return. Investors seemed to have forgotten about the second phase of the investment cycle. After the initial rally, investors need to see real improvements in earnings to support a rally. Currently, traders are not too optimistic about the future of the U.S. economy and are selling stocks to reflect this concern.

Despite an increase in government debt September Treasury Notes continued to post strong gains on Wednesday. Based on the main range of 124’10 to 112’25, traders were anticipating a retracement to 118’18 to 119’29. This first objective was met today. There may be a technical bounce off this price before the uptrend resumes. Investors are showing that they don’t seem to care about how much debt the Treasury is putting into the economy.

The downtrend resumed in August Gold. Falling commodity markets and a decline in the threat of inflation has caused this market to plunge sharply lower since posting a major top in early June at 992.10 and a minor top at 949.00 in late June. Without even the hint of inflation to attract buyers, continue to look for more downside pressure.

If you look at the big picture in November Soybeans, the current leg down does not look as bad as one would think following a huge plunge yesterday. The main range is 784 to 1099 ½. This range has created a retracement zone at 941 ¾ to 904 ½. The break earlier this week stopped at 881 ¼, but closed in a position to regain 904 ½. All this market needs to see is a little support to trigger the start of a short-covering rally.

Traders are selling soybeans in anticipation of a much larger crop because of weather improvements. Any change in the weather pattern is likely to have a substantial influence on the crop.