Home > Uncategorized > Brief Update: 2010/03/11: Firm Equities Continue to Weigh on Fixed Income Markets, Yet Not the US Dollar

Brief Update: 2010/03/11: Firm Equities Continue to Weigh on Fixed Income Markets, Yet Not the US Dollar

▪ Whatever ends up transpiring on the equities rally, it is obvious the markets are back into one of those phases where even weakish economic news will not help the fixed income unless and until the equities capitulate once again.  Which makes tomorrow’s US Advance Retail Sales (FEB) another of those critical end of week influences once again.   While there have been some bright spots this week, there is weakness in key elements… Which is what makes tomorrow’s US Retail Sales so very important to equity markets that are back up around previous highs. As the estimate for the report is already anticipating some weakening from the previous month’s 0.5% gain to just 0.2% on the headline number, any miss to the downside might put a cap on the equities rally. 

▪  The critical decision will be in the March S&P 500 future back up into its previous highs around 1,147.  The reason is that it is the more balanced trend between the once again euphoric NASDAQ 100 and DJIA that has become a real laggard, just like late last year. While we have moved onto discussing June contracts in the long-dated fixed income, the March S&P 500 future remains prominent due to lead contract indications for the weekly chart, which are the key levels that the June contract (at approximately a five dollar discount to the March) will need to deal with into the end of next week and beyond. And that is important because the critical decision on whether to push more aggressively above 1,147 will determine whether the March S&P 500 future can advance aggressively toward the 1,166 Runaway Gap Objective (set by Friday’s gap higher above the previous 1,125 area high of the near-term rally);…

▪ All of which is significant for the June T-note that has slipped down below the lead contract 117-16/-10 area Negated DOWN Break. Yet, even if it were to weaken all the way to the 116-00/115-16 area, that would only be a retest of its own Negated DOWN Break and some other significant underlying support back near the lead contract lows seen at the end of last year. That raises the question of…

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