Pre-open eMini SP 500 Morning Report 4.1.10

This is a guest post from Precision Capital Management

The Precise Take – Equity futures testing highs ahead of three day weekend

Leaders Analysis:  The EuroYen advanced strongly during the day yesterday and the break of the neckline of the inverse head and shoulders suggests a test of its 200 day moving average, currently at 130.71.  This should be generally supportive of equities in the coming weeks.  However, it has currently stalled near the 50% retracement of the 2010 down leg.  The US Dollar Index took out yesterday’s low and bounced off its 20 day moving average, which has been an important reference point since late last year.  A close below should allow it to test the March low and set up a potential head and shoulders top.  If today’s low holds throughout early next week, we should get a test of the March high instead.  On the daily, it looks as though 30 Year T-Bond futures are bottoming (and the yield topping).  For today, the leaders are slightly equities bearish.

Medium Term Analysis:  The markets have a good chance of moving today as tomorrow is a holiday for equities and the futures will close 45 minutes after the Employment Situation report.  Accordingly, the squaring of positions will happen mainly today, and there is the ISM Manufacturing report today at 10:00 am.  Equities are up overnight on strong manufacturing reports, so ISM will be especially…

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