Pre-open eMini SP 500 Morning Report 12.30.09

This is a guest post from Precision Capital Management

The Precise Take – Minor shakeout or end of trend?

Leaders Analysis:   Yesterday, we noted that several of the leaders were at inflection points, and updated intraday that the EuroYen forex cross had made a sharp intraday reversal from its 50 day moving average, which signaled to us the equities rally was drawing to a close.  Though the ES is indeed down overnight, interestingly, the EuroYen has advanced again to yesterday’s high.  The 30 Year yield looks as though it’s putting in a top, just in time for today’s 7 Year auction.  Correspondingly, 30 Year T-Bond futures are due for an oversold bounce.

Medium Term Analysis:  Overnight, the ES fell to just below the weekly pivot at 1113.75 (actual low 1113.00), and has bounced to VWAP as we write.  Respect of the weekly pivot combined with the EuroYen rally overnight suggests this may just be a minor shakeout.  A close in the ES below 1113.75, however, would negate this.  As we wrote earlier in the week, next week’s news calendar features ISM Manufacturing first thing Monday, with nothing major until Friday’s Employment Situation. 

Trading Today:  We’ll play the projected range today, which is the overnight low and the weekly pivot (1113.00 to 1113.75) on the lower end to yesterday’s low and close (1120.50 to 1121.75) on the upper end.  Today’s value area is…

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