Your MUST-READ Morning Stock Futures Cheat Sheet – 8.8.11 – “No man’s land”

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

The Precise Take – No man’s land

Big Picture Analysis:  Brinkmanship would appear to have a price after all, though the S&P downgrade of US debt Friday after the bell was hardly a surprise to many.  Yesterday evening, the ES opened nearly 30 handles down, but long term Treasury futures were only down modestly, then rallied higher.  Ironically, the flight to quality status of the very instruments that have been the subject of the most recent bout of uncertainty has apparently not been tainted.  Tomorrow’s FOMC meeting will be even more closely scrutinized, and we also note the format will simply be a statement released at 2:15 pm (no Q&A with Chairman Bernanke afterwards).  Odds of an announcement of a new round of large scale asset purchases (QE3) are very slim, but the markets will look for statements that further accommodation is at least in the cards.  If there is to be any short term coordinated central bank maneuvering, it is likely to be in foreign currency liquidity swaps.  Given the oversold nature of the equities markets along with tomorrow’s bullish FOMC day seasonality, we might see a strong relief rally over the next few days.  However, we would be remiss without noting we are in uncharted waters here, and the potential for markets to get much more oversold remains.

Trading Today:  With daily ranges in excess of 50 points, there is not much point in a projected range; however, the major support and resistance areas are marked below.  Friday suffered from the worst liquidity (as measured by our proxy through the ES) since May 7, 2010 (May 6 was far worse), and until large liquidity providers return, we can expect very volatile and erratic price action.

Today’s  Scheduled News (all times EDT)

Major Market Movers
None

Minor Market Movers
None

Tomorrow’s Scheduled News

Major Market Movers
FOMC Announcement at 2:15 pm

Minor Market Movers
Productivity & Costs at 8:30 am


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