This is a guest post from Precision Capital Management
The Precise Take – Equity futures down overnight on sovereign concerns
Leaders Analysis: After two days of closing at its 20 day moving average, the EuroYen has sold off sharply overnight as the US Dollar rose. Both have a bit farther to go to reach support or resistance, respectively. Accordingly, the leaders are equities bearish today.
Medium Term Analysis: We’ve been loath to comment on the Greek debt situation recently as it has been a red herring with respect to the US markets, but with yields on their short term debt skyrocketing to over 13% overnight, a nasty resolution is fast approaching. Contagion could knock US equities down a few notches, but once the panic is over, the rally should resume on a flight to quality basis and on the strength of existing market internals. The 1215.75 level we’ve been writing about is a long term equilibrium point for the ES. Acceptance above should allow for…
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