Pre-open eMini SP 500 Morning Report 4.23.10

This is a guest post from Precision Capital Management

The Precise Take – Equity futures to open near highs as turbulent week draws to a close

Leaders Analysis:  Overnight, the US Dollar Index rose to weekly R3 and backed off appreciably.  The high is also close to the yearly high of 82.24, so we are inclined to believe the rally will at least pause for a few days.  If the Dollar closes above 82.37, overhead resistance is scarce and the uptrend could continue for months, eventually testing the 86.00 level.  Accordingly, much is at stake for the Dollar, and of course the Euro, as it comprises 57% of the index.  Back to the short term, the EuroYen rallied into support and backed off a bit, so for this morning, the leaders are again equities neutral.

Medium Term Analysis:  As we updated yesterday, the S&P 500 is tracing a consolidating wedge pattern on the daily, and yesterday fulfilled the entire range.  The 20 day moving average has twice this week served as support on weak opening selloffs, so this will be an important reference point going forward.  It looks like the ES will open at the top of the wedge.  If it can push through 1207, there should be follow through up to the long term target of 1215.75.  Clearing this level by Monday would be beneficial for the bullish case as the Treasury auctions Tuesday through Thursday could be a…

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