Pre-open eMini SP 500 Morning Report 1.13.10

This is a guest post from Precision Capital Management

The Precise Take – Equities maintaining on US Dollar weakness

Leaders Analysis:   The EuroYen sold off hard yesterday, but has recovered much of it overnight.  T-Bonds had a large upside day after breaking the trendline we noted yesterday.  Most notably, though, the US Dollar Index broke support and has more room to go to the downside.  This should support equities into Retail Sales tomorrow and gives the leaders’ stance a slight bullish bias as to equities.

Medium Term Analysis:  Things have been relatively quiet this week, but that should end tomorrow as the news tempo picks up significantly and with Friday’s options expiration.  Next week, earnings will be in the spotlight and the week after features an FOMC announcement.  Accordingly, the fate of this rally within a rally will be duked out by the bulls and bears and there should be some big range days into the end of January.

Trading Today:  Yesterday, the ES respected the 1128.75 high volume level (within 3 ticks) and closed over the weekly pivot, so the bulls are maintaining control for the time being.  As we wrote before, the next major high volume level to the downside is not until 1109.00, so a move below 1126.25 has a chance to…

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