Wednesday, July 01, 2009

Morning Briefing for July 1st

Going into today's open in the S&P 500 Index futures (ES; bottom chart), note how we held support yesterday just below the 910 level and then bumped higher in the overnight session on strength in Europe. Per the early AM tweet, we had selling come into the market on the employment news, and that has left us firmly in a multi-day trading range with yesterday's lows and highs defining the support and resistance near term.

We've seen recent dollar weakness versus the euro, as the dollar is knocking at the upper end of its multi-day range. Rates on the 10-year Treasury have bumped higher this morning, and we're looking at nicely higher gold and oil prices. Note also that the NASDAQ and Russell small cap indexes are also quite near the upper end of their ranges. In all, we have to grade those intermarket themes as bullish.

Failure to take out yesterday's highs in early trade will target yesterday's pivot level. At this juncture we're about midway between pivot and R1 (see Twitter post for update of key price levels); handicapping the move to one of those levels sets up an early morning trade.

9:07 AM CT - I've updated the chart (top) to show how selling after the 9 AM CT numbers has taken us back below the overnight highs in ES, keeping us in the multi-day range. We'll need to see significant fresh buying to break that range to the upside. Absent that, yesterday's pivot and the overnight lows become logical downside targets.