Pre-open eMini SP 500 Morning Report 4.27.10

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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http://www.precisioncapmgt.com/wp-content/uploads/Precision_Report_April_27_10.pdf

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