RG needs to be out this morning, but he sent me his macro commentary for today: “Notice as I told you last week the mid 1020s continue to be the dividing line for bulls and bears and my bias of “slightly more long than short” has played out as expected. Today is pivotal so I would be careful and wait and see what shakes out before making any major moves. The reason is that as expected some institutions that were short covered so as not to have any surprises for the long weekend in case of major news sparking a rally in Asia or Europe on Monday. Nothing major happened so many shorts may return now that they are back. On the other hand we may see a holding pattern for the jobless claims number on Thursday. If we see a dip, that coupled with the 9.5% unemployment number last week could spark a bit of a rally, though I don’t think anything major. The bottom line is Treasury yields are leading equities around. There is no money to be made in quality so many are willing to take risks in equities they wouldn’t otherwise take. In my opinion that is the only thing holding the S&P up at the moment. Many predict the Euro is still headed to parity and the S&P will go right down with it if that is the case.”
Both the European and Asian markets have moved up strong overnight. We are starting to get some good numbers from earning releases which are easing some of the flight to safety. The Yen is down whle the Euro is up; both of which support the overnight rise in the ES. The ES has climbed right back up into the 1026 area where it spent most of last week. There is much resistance overhead which should provide several good opportunities for short plays. There is also a lot of support below, but support areas aren’t very clear until around 1018.50. (Note: Yesterday’s prices and pivots are based on Friday 7/2 and are different than shown on the chart where the software used Monday’s partial Globex session for it’s calculations).