Pre-open eMini SP 500 Morning Report 2.25.10

This is a guest post from Precision Capital Management

The Precise Take – The risk trade is at a critical juncture

Leaders Analysis:  The EuroYen sold off again overnight to make a new 52 week low.  In fact, it passed through the 120 level (on the way up) exactly a year and a day ago.  The US Dollar Index is correspondingly up, but only nominally and has not exceeded last week’s high.  30 Year T-Bond futures are up, with the yield breaking moving average support and approaching long term trendline support, despite yesterday’s poor 5 year auction.  It’s increasingly looking like the US Dollar will break resistance and rally higher.  We will know after tomorrow’s GDP report at 8:30 am.  All in all, the leaders are slightly equities bearish.

Medium Term Analysis:  Overnight, the ES sold off from yesterday’s settlement after having failed intraday yesterday to accept in the green value area below.  Jobless Claims disappointed as we write and the ES is down to critical support.  As we said yesterday, if it closes below 1090, it should test at least 1060 to 1070.  There are a number of economic reports tomorrow, which will provide…

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