The BOE (England) maintains a steady course so no great shakes there as expected. The BOJ (Japan) holds back on open-ended asset purchases, for now, as Shirakawa conducts his last meeting. The new members will take over in one month and the money printing will continue in force to weaken the yen (dollar/yen up). The ECB Rate Decision is 7:45 AM EST with the Press Conference at 8:30 AM. Draghi's words carry clout and will move the euro and the futures. The euro is at 1.3019. European markets are higher today.
Chain store sales data is on tap this morning along with the Challenger Job Report. At 8:30 AM, when Draghi begins speaking, the Jobless Claims, Productivity and Costs, and International Trade data will hit. Natty Gas Inventories are at 10:30 AM and Consumer Credit at 3 PM. Earnings from COO, P, SKUL, SFD and WDAY (an IPO) are of interest today. Bank stress tests are expected after the closing bell today. The financials are key to this current market rally. The bank stress test results are expected to be positive with high-five's all around, so the risk is obviously to the down side. Next week will provide the exact guidelines by which any bank is allowed to reduce its capital needs, as well as declare a stronger dividend. The financial charts are setting up with negative divergence so the stress test results later today could definitely supply a catalyst to cause the banks to roll over from here. If not, the banks may receive some buoyancy but chances are that the upside is priced in, but not the downside.
Oil is 90.82. Brent 110.85. Futures are slightly above the flat line now. The 10-year yield is 1.93%. Copper is up this morning sitting at 3.50. Volatility is key again so pay attention to VIX 15.50. The bulls are fine as long as the VIX remains under 15.50. The market bears will growl strongly if 15.50 and higher is printed. For the SPX starting at a new 2013 closing high at 1541.46, the bulls need three points to push above 1545 to create an upside acceleration that will test the strong 1548 resistance quickly. The bears need three points lower to push under 1538 and this would accelerate a downside move. Thus, pay attention to the ECB during the hour ahead and note the effect on the S&P futures. A move through SPX 1539-1544 is sideways action today.
Note Added 3/7/13 at 7:46 AM: The ECB leaves interest rates unchanged with the benchmark at +0.75%. The euro is 1.3042. The futures pull back to a shade above the flat line, so no great shakes so far. The 8:30 AM time will create more market movement.
KS, huge move lower in CPC yesterday. Bullishness is getting ridiculous. No negatives are priced in at all. Everyone's sell button is packed away until May.
ReplyDeleteGood eye Anon. That is some drop and confirms the uber complacency in the markets. The action was odd for several days remaining up in that 1.10-1.18 area but traders have now shown their cards. If anyone is short the market you are glad to see 0.71 CPC. It may take a few more days, or week or three, but this indicates markets are at a significant top. Very tricky markets these days. When the CPC spikes higher tomorrow or next week, that may very well tell the beginning of a substantial broad market sell off. The CPC chart can be posted tonight.
ReplyDeleteKS, Do u feel we have now peaked and we should dip for a decent drop or you feel more upside is coming?
DeleteI have a few underwater shorts and not sure if i should hold these or cut them , if its going to have a bigger rise then i may consider cutting, if u think we drop from her ethen i will hold these ftse and dax shorts.