Pre-open eMini SP 500 Morning Report 3.24.10

This is a guest post from Precision Capital Management

The Precise Take – Equity futures down marginally on surging US Dollar

Leaders Analysis:  Overnight, the US Dollar Index finally broke through resistance and its six week trading range on a ratings downgrade of Portugal.  It has advanced nearly to critical resistance we outlined yesterday, from 81.90 to 82.00, which we speculated it may not be able to breach.  The EuroYen and 30 Year T-Bond yields are confirming this theory so far as they are both up, when existing correlations would have them down.  Having said that, it’s a bit early to become to emboldened in this claim until we see what price actually does if and when it reaches the resistance level.  Because of the mixed signals, for today, the leaders are equities neutral.

Medium Term Analysis:  Durable goods was a non-event, coming in positive but in the middle of the consensus range, so focus returns to the Eurozone debt and Friday’s GDP.  Next week will feature the end of the quarter with its accompanying window dressing and will close with the Employment Situation.  Equities should be able to increase their gains, but we will keep a close eye on the Dollar, as further strong advances could limit upside potential.  The ES has a well formed high volume area (highlighted below in blue) that should serve as good support.  Any venture below…

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