Pre-open eMini SP 500 Morning Report 5.17.10

This is a guest post from Precision Capital Management

The Precise Take – Equity futures first down sharply, then up

Big Picture Analysis:  The ES took out Friday’s low overnight on a major selloff in Asia, but then rallied nearly 20 points.  Global news is still driving the markets, but we also have opex to contend with this week.  We’re looking for a bottom between now and Wednesday, but volatility could make it difficult to recognize.

Leaders Analysis:  The US Dollar Index entered territory overnight it had not been in since March, 2009.  We were anticipating an interim top somewhere between 86.92 and 87.83.  Given that it entered this range with a high of 87.02, it’s possible it arrived or is at least likely to arrive over the next few days.  If 87.83 gives, the next major target is not until 91.61.  The EuroYen forex cross was down and then up overnight, coming within 2% of its May 6 spike low.  The 30 Year Treasury yield is up marginally, and now that its downward trendline is confluence with the 200 day moving average at about 4.45%, it looks like…

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