Monday, August 03, 2009

Morning Briefing for August 3rd: Marching Toward 1000?

Here's a quick look at how we're setting up for today's stock market open. Note that we were in a multi-day trading range from July 23rd through 29th before vaulting higher on the 30th and starting a new trading range. We're now peeking above the July 30th highs, so the big question is whether we'll fall back into the range from July 30th or sustain a breakout to the SPX 1000 level. We're seeing weakness in the U.S. dollar vs. euro, strength in commodity prices, a rise in 10-year Treasury yields, and firmness in overseas stocks--particularly emerging markets. All of those intermarket themes weigh on the bullish side for stocks.

I'm watching the 994 level in ES, which is the high from July 30th, to see how we trade around that price early in the trading day. That will provide good indication of whether institutions are ready to accept value higher with a breakout move vs. sell into the opening price strength. To this point, indicators remain bullish and sectors largely remain in uptrends. I'll post intermittent updates via Twitter and the blog to gauge market dynamics (follow Twitter feed here).