Your MUST-READ Morning Stock Futures Cheat Sheet – 7.26.11 – “Fed and Treasury in the spotlight”

The exclusive Markets Morning Report is supplied by The Precision Report.

The Precise Take – Fed and Treasury in the spotlight

Big Picture Analysis:  Yesterday, bulls were able to discount the disappointment that facilitated the large down gap Sunday evening in equity futures.  Overnight, the ES traded just inside of yesterday’s day session high and low.  As we draw closer to the meat of the major news releases this week, we would expect activity to pick up.  Besides the debt ceiling issue, there is Durable Goods and the Fed’s Beige Book released tomorrow, which the Fed produces in preparation for the upcoming FOMC meeting on August 9.  The first estimate of Q1 GDP is released Friday, which also commences the Fed’s annual Jackson Hole event.   Many Fed governors will be speaking, and it is not lost on traders that last year’s meeting leaked hints of the resumption of Fed balance sheet maintenance and (subsequent) expansion (QE2).  Accordingly, risk markets appear poised to run with any good news, provided they can avoid a rout on any disappointment.   Until the ES accepts above 1350 or below 1290, it simply remains in a trading range.

Trading Today:  The lower end of the projected range includes daily S1, the overnight low and a 50% retracement, from 1325.75 to 1327.00, and we will also watch the 1331.25 to 1332.00 area as potential support.  We would consider longs from the 1320.00 to 1320.50 or 1317.00 to 1317.50 areas, but likely not below.  The upper end of the projected range includes the overnight high, yesterday’s high, and daily R1, from 1339.25 to 1340.25.  We would also consider a short from the 1342.25 to 1342.75 or 1346.25 to 1347.00 areas, but likely not above.  We expect some volatility around the four economic reports released at 10:00 am.

Day Trading Guide

Upside Price Action Targets
1352.50, 1341.75, 1339.25

Downside Price Action Targets
1252.75, 1258.25, 1262.50, 1269.75
1274.50, 1292.50, 1311.00, 1320.50,
1325.75

Today’s  Scheduled News (all times EDT)

Major Market Movers
Consumer Confidence at 10:00 am
New Homes Sales at 10:00 am

Minor Market Movers
Richmond Fed Mfg Idx at 10:00 am
State St. Investor Confidence Idx at 10:00 am
2 Yr Note Auction at 1:00 pm

Tomorrow’s Scheduled News

Major Market Movers
Durable Goods at 8:30 am

Minor Market Movers
EIA Petroleum Stats at 10:30 am
5 Yr Note Auction at 1:00 pm
Fed Beige Book at 2:00 pm


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