This is a guest post from Precision Capital Management
The Precise Take – Equity futures rally to new highs ahead of busy news week
Leaders Analysis: The EuroYen rallied Friday, but has not been able to close above its 20 day moving average. It was nominally above, but now below overnight. Long term yields are consolidating just under resistance and look poised to continue the down move that began April 7. However, poor demand at one of the large auctions this week could prevent this. The US Dollar Index had a large down day Friday and, for the time being, the inverse correlation to equities has reasserted. It is up nominally overnight after first taking out Friday’s low. The leaders are slightly equities bearish for today.
Medium Term Analysis: With an FOMC Announcement on Wednesday and GDP on Friday, it’s a full news week. Though today is quiet, earnings announcements before and after the bell could cause some movement. As we wrote last week, there is a bearish seasonality during the 2, 5 and 7 year auctions, which occur tomorrow through Thursday. Having said that, the ES rallied overnight through 1215.75 resistance, which will probably limit downside. It would be beneficial to longs to…
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